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Financial Accounting Principles Assignment

   

Added on  2021-02-20

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FinancialAccountingPrinciples
Financial Accounting Principles Assignment_1

Table of ContentsINTRODUCTION...........................................................................................................................3REPORT..........................................................................................................................................3CLIENT 1........................................................................................................................................6CLIENT 2......................................................................................................................................15CLIENT 3......................................................................................................................................17CLIENT 4......................................................................................................................................19CLIENT 5......................................................................................................................................20CONCLUSION................................................................................................................................1REFERENCES................................................................................................................................2
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INTRODUCTIONFinancial accounting in business context implies to collection of one or activities andfunctions that includes classification of events and transactions, entering such financial eventsand transaction, and providing relevant reports to management and stakeholders. Financialaccounting principles are set of rules and guidelines that provide a basic framework forconducting activities concerned with processes of financial accounting (Kimmel, and et.al.,2016). Adoption of financial accounting principle provides smoothness in entity's operationswhich lead to enhancement in performance. Report defines financial reporting and its scope orobjectives, interest of different stakeholders in information generated through financialaccounting in context of Access Accounting Ltd, an UK's accountancy firm. The report alsopresents recoding under double entry system, accounting concepts, reason behind preparation ofbank reconciliation statement, use of control accounts and utility of suspense account.REPORTFinancial accounting mainly emphasises on preparation and presentation of annualperformance report and financial statement. Financial accounting combines tasks which arerelevant for business enterprise to know its actual position in market. There are many view aboutfinancial accounting but core concept of it is to assess performance and report performance tointerested users and parties. As per R.N Anthony, “ Almost all business entities adopts anfinancial accounting system which can be denied as functions of gathering, evaluatingclassifying and presenting financial events for overall effective assessment of performance”.Form this definition it is clear that financial accounting is core need of business and it includessystematically management of financial information in order to achieve better accountability.Financial accounting is covers all the business and financial operations of company whichcontributes towards a detailed analysis of organisation's performance (Mirza and Ankarath,2012). Accounting principles like GAAP is used by accountants under financial accounting inorder to make statements of performance of business entity. Accounting principles provides amanner to record transactions and solve accounting issues in recording of transaction. Underfinancial accounting accountants first collects information through bills, receipts and otherwritten or oral sources to record transaction in journal, then classify them as per their nature topost them in relevant ledger account and at last prepare balance sheet, income statement and
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other statements for reporting purpose. Following are purpose or main objectives of financialaccounting, in business context, as follows: Financial accounting provides information to increase in economic efficiency by assistingin financial decisions.It generates information for both kind of stakeholders: internal and external.It develops a core base for preparation of income statement, statement of financialposition, analysis of cash flow and fluctuation in equity (Banerjee, 2012).It develop a framework for timely compliance of rules and regulations applicable forbusiness organisation. It assess the overall profitability, liquidity and financial performance of entity. It help in identification of new financial resources and effective utilisation of existingfinancial resources.Stakeholders:Information of Financial accounting mainly generated for stakeholders. They are entity,individuals, organisation and other parties who have power to influence or affect a businessentity and who are also impacted by acts of business entities. In simple language stakeholdersmeans to interested partiers or influencing/influencers parties. Stakeholders may be independentor dependent as per their stake in any business entity, but mostly they are divided in internalstakeholders and external stakeholders (Renz, 2016). Key stakeholders of an entity are owners,investors, suppliers, management, employees, creditors or lenders, government, agencies etc.Following is discussion on internal and external stakeholders, as follows:1. Internal Stakeholders: Internal stakeholder are those stakeholders who are closely relatedwith business enterprise like board of directors, partners, management, employees, subsidiariesetc. Here is brief discussion on business entity's internal stakeholders:Employees: Employees are key human resource and internal stakeholders for a businessentity as they directly assist company in achievement of organisational objectives byapplying their efforts, skills, knowledge, efficiency and experience. Employees havinginterest in a business entity in terms of their benefits of employments, future growth inentity and secure career (Collier, 2015). Business entities are also affects by actions ofemployees as they determines the growth of company in market.
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Owners: They usually holds top position in a business entity as they are main founder oforganisation. Owners are internal stakeholder as they are real contributors in businessorganisation. In listed company's context they hold stake in form of shares and securities.They are responsible for taking key decisions of entity so most affected party byorganisation's performance.2. External Stakeholders: External stakeholder are those stakeholders who are not closelyconnected or outsider with business enterprise like statutory authorities, lenders, suppliers,creditors, customers etc. They have more impact on organisation's performance as compare tointernal stakeholders. Following are significant external stakeholder of a business organisation,as follows: Government: Taxes, duties and penalties are major source of government's revenues inUK. Government collects information of business entities to collect duties and taxes.They are external stakeholder of business entities as they are interested in profits ofcompany in order to collect different taxes. Business enterprises are influenced byintroduction of new regulations, rules and policies (Chambers, 2014). Governmentmonitors functions and decisions of business organisation to increase their revenues. Customers: Business enterprise growth depends on its customer base as they affectsorganisation's sales and demand of products and services. Customers are externalstakeholders who are interested in organisation's products and services. A shift incustomers' preferences in relation to product or services of business entity can affectturnover of company.Suppliers: Suppliers are provider of raw materiel and other essential items to businessentity for producing end product. They affects organisation's efficiency to fulfil demandof product in market and sales of company in long run. They provide a credit periods tobusiness organisation so they always have concern about repayment of credits.Regulators and agencies: Regulators are responsible for controlling and monitoring actsof corporates and other business entities. They are stakeholder of company as they areconcerned about company's performance and ethical compliances. They can affectcompany's performance by introducing new policies and framework for operatingactivities or functions.
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CLIENT 11.1Journal Entries and Ledgers in the book of Alexandra Study:DateParticulars.....DebitCredit01/01/19Premises A/c....................................................................Dr.240000Motor Van A/c.................................................................Dr.51250fixtures A/c................................................................ Dr.8100Inventory A/c................................................................ Dr.23900P Mole A/c................................................................ Dr.4400F Lane A/c................................................................ Dr.6100Bank A/c................................................................ Dr.68400Cash A/c................................................................ Dr.15600To S Hood A/c12150To J. Brown A/c16600To Capital A/c (Balancing Figure)389000(Being Owner's Capital is calculated )Therefore, Alexandra Study's Capital at 1st January= £ 389000DateParticularsDebitCredit01/01/19Storage cost A/c...............................................................Dr.450To bank A/c450(Being storage cost is paid)02/01/19Purchases A/c ................................................................Dr.7680To S Hood A/c1450To D Main A/c2060To W Tone A/c960To R Foot A/c1610(Being goods purchases on credit from various parties)03/01/19J Wilson A/c ................................................................ Dr.1200T. Cole A/c ................................................................ Dr. 1650F. Syme A/c ................................................................Dr.2100J. Allen A/c ................................................................ Dr.1020P. White A/c ................................................................Dr.2520F Lane A/c ................................................................ Dr.980To Sales A/c9470
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