Financial Accounting Principles

Financial accounting
Principles

Table of Contents
INTRODUCTION................................................................................................................................4
CLIENT 1.............................................................................................................................................4
a) Prime Book entry.....................................................................................................................4
TASK 1.................................................................................................................................................4
1. Drawing journal entries and calculation of owners capital.....................................................4
A. Preparing the books of Prime Entry........................................................................................4
b) Complete double entry recording............................................................................................5
Draw trial balance......................................................................................................................12
TASK 2...............................................................................................................................................13
a. Preparing statement of profit and loss....................................................................................13
b. Preparation of balance sheet..................................................................................................14
TASK 3...............................................................................................................................................15
a. Framing profit and loss a/c for Raintree Ltd..........................................................................15
b. Statement of financial position of Raintree Ltd.....................................................................15
c. Explaining the accounting concept of consistency and prudence..........................................16
d. Illustrating two widely used methods of depreciation along with their appropriateness.......17
CLIENT 4...........................................................................................................................................17
a. Explaining the purpose of preparing bank reconciliation statement......................................17
b. Assessing the reasons due to which bank records vary from cash book...............................17
c..................................................................................................................................................17
Bank reconciliation statements as at 1 December 2016............................................................17
Prepare updated cash book........................................................................................................18
Bank reconciliation statements as at 31st December..................................................................18
CLIENT 5...........................................................................................................................................18
A) prepare and balance books of Henderson for May 2016......................................................18
Sales ledger control account......................................................................................................18
Purchase ledger control account................................................................................................19
b) Explain the term control account and needs to prepare control account...............................19
TASK 6...............................................................................................................................................19
a. Describing suspense account along with its main features....................................................19

b. Drafting a trial balance by using control account as balancing figure...................................20
c..................................................................................................................................................20
d. Differentiating suspense and clearing account......................................................................21
CONCLUSION..................................................................................................................................21
REFERENCES...................................................................................................................................22

INTRODUCTION
Finance is regarded as integral role in the business in uplifting the current conditions of
an entity which needs to be managed with the passage of time that imposes external burden on an
entity to handle all the external market complexities faced by an entity in the business. Role of
business gets increases with the time as their desired aim is to fulfill all kinds of responsibilities
imposes on an entity. This is report is all about reflecting true image of an entity by considering
all the external market factors.
CLIENT 1
a) Prime Book entry
TASK 1
1. Drawing journal entries and calculation of owners capital
A. Preparing the books of Prime Entry
Journal of Alex Study’s for the month of May 2016
S. No. Particulars Debit Credit
1. Storage expenses a/c Dr.
To bank a/c
400
400
2. Purchase a/c Dr.
To S. Hood a/c
To D. Main a/c
To W. Tone a/c
To R. Foot a/c
6080
1450
2060
960
1610
3. J Wilson a/c Dr.
T. Cole a/c Dr.
F. Syme a/c Dr.
J. Allen a/c Dr.
P. White a/c Dr.
F. Lane a/c Dr.
To sales a/c
1120
1640
2080
910
2420
770
8940
4. Motor car expenses a/c Dr.
To cash a/c
470
470
7. Drawing a/c Dr.
To cash a/c
1500
1500
9. T. Cole a/c Dr.
J. Fox a/c Dr.
To sales a/c
680
1310
11. Sales return a/c Dr.
To J. Wilson
680
270

To F. Syme a/c 410
14 Van a/c Dr.
To Abel Motors Ltd
28500
28500
16 (a). Bank a/c Dr.
Discount allowed a/c Dr.
To P Mullen
(b)
Bank a/c Dr.
Discount allowed a/c Dr.
To F. Lane
(c)
Bank a/c Dr.
Discount allowed a/c Dr.
To J. Wilson
(d)
Bank a/c Dr.
Discount allowed a/c Dr.
To F. Syme
1330
70
2945
155
807.5
42.5
1586.5
83.5
1400
3100
850
1670
19 R. Foot a/c Dr.
To purchase return a/c
50
50
22 Purchase a/c Dr.
To L. Mole a/c
To W. Wright a/c
3740
1830
1910
24 a.
S. wood a/c Dr.
To Bank a/c
To Discount receive a/c
b.
J. Brown a/c Dr.
To Bank a/c
To Discount receive a/c
c.
R. Foot a/c Dr.
To Bank a/c
To Discount receive a/c
3600
4600
1400
3240
360
4140
460
140
1260
27 Salaries a/c Dr.
To bank a/c
4800
4800
30 Business rates a/c Dr
To bank a/c
1320
1320
31 Abel motors Ltd. a/c Dr.
To bank a/c
20500
20500

b) Complete double entry recording
Sales Journal account
Date Particulars Amount Date Particulars Amount
31/05/16 To balance C/d 1310 03/05/16 BY J. Wilson 1120
03/05/16 By T. Cole 1640
03/05/16 By F. Syme 2080
03/05/16 By J. Allen 910
03/05/16 By P. White 2420
03/05/16 By F. Lane 770
09/05/16 T. Cole 680
09/05/16 J. Fox 1310
1310 1310
Sales Return Journal account
Date Particulars Amount Date Particulars Amount
11/05/17
To J.
Wilson 270 31/05/16
By Balance
c/d 680
11/05/17 To F. Syme 410
680
Purchase Journal account
Date Particulars Amount Date Particulars Amount
02/05/16 To S. Hood 1450 31/05/16
By Balance
c/d 38320
02/05/16 To D. Main 2060
02/05/16 To W. Tone 960
02/05/16 To R. Foot 1610
14/05/16
To Abel
Motors Ltd 28500
22/05/16 To L. Mole 1830
22/05/16
To W.
Wright 1910
38320
Purchase Return Journal account
Date Particulars Amount Date Particulars Amount
31/05/16
By balance
c/d 50 19/05/16 By R. Foot 50