Financial Accounting: Analysis of Financial Statements, Ratios, and Business Bank

Financial Accounting

Contents
INTRODUCTION.......................................................................................................................................3
QUESTION 1..............................................................................................................................................3
(A) Financial statement of Bob’s account................................................................................................3
(b) Three main features of information for users of financial statements.................................................4
QUESTION 2..............................................................................................................................................6
(2a) Calculation of ratio and interpretation..............................................................................................6
(2b) Business bank..................................................................................................................................8
(2c) Depreciation of machinery account..................................................................................................8
CONCLUSION.........................................................................................................................................10
REFERENCES..........................................................................................................................................11

INTRODUCTION
Financial accounting is a broad concept with a range of tasks consisting of tracking,
analyzing and resubmitting the effects of these reports to consumers. The activities affected are
material to the financial statements. It’s used to prepare financial statements such as the balance
sheet, income statement and cash flow statement for the purpose of revealing the market
reputation and performance over a specific period of time that is usually yearly. Accurately,
financial accounting concerns the creation of such documents, which are centered on reliable
information and obey "Generally Accepted Accounting Principles" (anything else recognized as
GAAP). GAAP sets knowledge management on even a broad variety of subjects in the United
States, namely financial statement analysis (Anantharaman, 2017). The main aim is to present
these reports to the shareholders as their money is invested in the organization. In this report
consist of year end accounts, main features of information which are beneficial for the users.
Along with, calculate different types of financial ratio and interpret them to analysis the financial
position of business and write up bank account in each month. Moreover, apply different method
of depreciation and know different accounting concepts.
QUESTION 1
(A) Financial statement of Bob’s account
Trading Account: Trading account is extremely detailed to recognize the productivity of the
'goods' purchased or produced and sold either by entrepreneurs. The gross product is the contrast
here between sale price and the production value of the products. The word 'products' implies the
products which were purchased for reselling. If the money from the sale are higher than the
benefit of the sold goods, the gross money is generated. If the money raised of sale are lower
than the cost of the sold goods, the gross loss is charged. Trading Account may be described as
accounts that reveal the outcome of purchase and sale of commodities. Trading account is an
account of register. This includes the outcomes of a time of activities (Aray, Pedauga and
Velázquez, 2017).
Trading Account of Bob’s for the year end 30 April 2019
Particular Debit Particular Credit
To Purchase 15700 By Sales 30000
To Opening stock 4700 By Closing stock 4400
To Shop wages 4420
To Gross Profit 9580
34400 34400