Financial Accounting Principles - PDF

Financial Accounting
Principles

TABLE OF CONTENTS
Table of Contents.............................................................................................................................2
INTRODUCTION...........................................................................................................................1
BUSINESS REPORT......................................................................................................................1
(a): Concept of Financial accounting.....................................................................................1
(b): Regulation related with financial accounting..................................................................2
C): Principles and regulations used in accounting.................................................................3
(d): Various convention and concept of materiality and consistency.....................................4
CLIENT 1: Journal Entries..............................................................................................................5
P1: Information regarding double entry bookkeeping............................................................5
P2: Concept of trail balance and its balancing measure.......................................................14
CLIENT 2......................................................................................................................................15
P3: (a): Formulation of financial account and related trail balance.....................................15
(b): Financial statements of peter piper................................................................................15
CLIENT 3......................................................................................................................................16
P4: Formulation of financial statements and wide number of examples..............................16
P5: Bank Reconciliation process..........................................................................................19
CLIENT 4......................................................................................................................................20
BRS statements as one 1st December, 2017..........................................................................20
CLIENT 5......................................................................................................................................20
P6: Procedure of Reconcile control account........................................................................20
CLIENT 6......................................................................................................................................22
(a): Main feature of suspense account..................................................................................22
b) Trial balance (£)...............................................................................................................22
(c) suspense account.............................................................................................................22
(d): Comparison....................................................................................................................22
CONCLUSION..............................................................................................................................23

REFERENCES..............................................................................................................................24

INTRODUCTION
Finance is considering as life blood of business. The company used to collect funds from
various sources in order to manage and operate their everyday transactions that are done within
an accounting period of time. Financial accounting is one of the appropriate process that will be
helpful for the owner as well as accountant in order to record all the essential transactions those
are incurred during the time. These entries are posted into their respective statements as per their
data of occurrence. This project module aims as analyzing financial condition and health of the
company (Ward, 2012). For this purpose, regular recording of business transactions is being
done. On the basis of collected records, its legers posting, trail balance and other crucial
statements is being prepared under this report. In order to keep accuracy of the data, every
records must be recorded as per the accounting principle as well as other specific standards.
Evaluation of bank reconciliation is prepared in reliable order to examine total cash amount
balance available to the company during the end of accounting period.
BUSINESS REPORT
(a): Concept of Financial accounting
In every organization, it is necessary for them are organize sufficient amount of capital
for the purpose of planning their future projects in effective manner. In this process, managers
need to organize capital from various sources. Financial accounting is said to be appropriate art
of recording, dividing and evaluating in important way in respect to capital, transaction and
activity that are done within an organization. It is also considering as reliable branch of
accounting that used to provide right direction to a company’s financial transaction by recording,
summarizing and present in financial report. Some of them are profit and loss statements,
balance sheet and cash flow statements (Francis, Hasan and Wu, 2013). Most of the company
used to release its financial statements on continuous basis.
The statements are taken into consideration as external because they used to provide
specific information to the people from outside the company. It is necessary to point out the
valuable purpose of financial accounting that is not reported as value of the company. In-spite of
their objective which is provided for other to assess the interest of an organization. These
financial report is being done with the aim of attaining specific aims that are set by the company.
there are some crucial firms those are using various accounting systems by using IFRS standards.
Financial accounting is considering as one of the effective aspects which will be considered for
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attaining maximum return in near future. Financial report are being taken into account in order to
keep all the standard and responsibility of manager and accountant. Some of the vital statement
those are used in financial accounting purpose are mentioned underneath:
Profit and loss statements: It is known as one of the effective report that is being
prepared by the accountant by summarizing the revenue, cost and expenditure of the company
incurred during the time. It would indicate total earning and expenses in the mentioned period of
time, usually a fiscal year. It will assist companies in analyzing, whether the company is making
appropriate revenue, income statements of an organization (Edwards, 2013).
Balance sheet: It would be happening as one of the crucial statements that is being used
as particular data those are done by the company during the time. It is considering as company’s
main statements which would provide overall health position as well as liquidity state. Financial
firms and other stakeholder used to present specific data about assets and liability of the
company. This seems to be effective financial statements for delivery available loans and
investment done in an accounting period.
Cash flow statement: It seems to taken into account valuable information about all cash
inflows and outflows that are incurred during the time. These amounts are collected from various
activity such as operating, investing and financing. These are prepared to make evaluation of
whether company is having sufficient amount of capital to make future investment in near
project.
(b): Regulation related with financial accounting
Financial accounting board is considering as one of the private, non-private business
standard imposing bodies that primary aim is to establish better outcomes to the company. The
required needs rules and regulations which would assist in formulating financial statements in
essential manner for various reasons. Such as to ensure that requirement of users of financial
records must be met with at least a simple data that are prepare by the company within an
accounting period of time (Beatty and Liao, 2014). There are not any other issues required by the
company in order to report various activities that are necessary for making sustainable demand of
the company. present reporting and practices are having more link with future growth and
financial balance of an organization. Although, financial reports are reliable for making
comparison of company’s performance on the basis of last year condition. The financial
information parties are large enough and having diversified impacts as per the financial
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accounting. In case of any modification change in the data those are required as an individual for
plenty of ways. In order to maintain appropriate rules and regulation that are based on certain
norms such as IASB. The main motive of IASC which was used to promote global consistency
among financial statements which would prepared through company at national level. It does not
have to force by law because, every information that are mentioned under the report are based on
certain polices and rules. These standard are considered while recording of various transaction
into different statements.
C): Principles and regulations used in accounting
In accordance with various transactions that are done within an accounting period of time,
accounts are using various rules and regulations that are utilized or proposed through using
various guidelines that are required to be taken into account while recording of data into the
statements. It has been observed that there are various types of rules and concept which will be
use by manger while recording or posting of any kind of financial transactions. In case of using
accounting records, detailed regulations and laws that are being use by FASB (Barron, Chung
and Yong, 2016). It has been found that some of the effective distributes its financial records to
public and required to make impacts on GAAP principles during the time of developing their
reports. Likewise, in accordance with company’s overall inventory which is public traded and
need as financial record through audited through an appropriate accounting skills. Some of the
valuable principles are mentioned underneath:
 Cost principles: According to this accounting norms, it has been known as that cost
which would be based on historical cost aspects. It required that all assets must be
recorded only at cash basis during the time of acquisition.
 Going concern principle: The seems to be assumptions that every entity would remain
as effective business for specific aspects for foreseeable future. As business would
continuous for longer period of time.
 Full disclosure principle: It is said to be vital information that would be made by
stakeholders by using financial report which data will be disclosure during prepared data.
This seems to be primary aim of manager to provide all essential data which are
mentioned under different reports. It is needed for every organization to make future
planning by using various data of the company in reliable and accurate manner.
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