Solved Financial Accounting - Assignment (Doc)
Added on 2021-02-20
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Financial Accounting
Table of ContentsINTRODUCTION...........................................................................................................................1Question 1........................................................................................................................................1Question 2........................................................................................................................................2Question 3........................................................................................................................................4Question 4........................................................................................................................................7Question 5......................................................................................................................................10CONCLUSION .............................................................................................................................13REFERENCES .............................................................................................................................14
INTRODUCTIONFinancial accounting is really the method by which the countless transactions arisingfrom company activities are recorded, summarized and reported throughout a number of years(Financial reporting, 2019). These operations are described in the preparing of annual reportswhich document the working efficiency of the corporation over a defined period, such as thestatement of financial position, income statement and cash flow statement. The choice ofaccounting standards used during financial reporting relies on the legislative and reportingdemands faced by the company. It is essential to note that the aim of economic accounting is notjust to disclose a company value. Financial accounting norms in particular, rigorous guidelinesshould be applied to ensure that financial disclosures are helpful and of excellent quality. Theaim of report is to provide information to managers to assess the actual financial condition. Under report, compare between balance sheet and income statement is mentioned. Aswell as multiple components of the remark of bank reconciliation and how to reconcile checkand suspense records. Question 1Income statement: This statement's shows the financial outcomes of a business during aparticular time frame. It discloses the amount of income generated and expenses incurred by acompany to run operation in effective manner and maintain a proper net profit throughout theyear (Dayanandan and et.al., 2016). There are number of item that are part of income statement'ssuch as:RevenueTax expenditurePost profit before deducting tax for discounted operationsProfit or loss at the end of year.Other comprehensive income which are divided intro different component.Total comprehensive revenue. Financial statements of Sole TraderParticularsAmountParticularsAmountTo Opening Inventory160000By Sales14000001
To Purchase840000By Closing Inventory100000To Wages440000Add: Outstanding20000460000To Gross Profit4000015000001500000To Heat and Light80000By Gross Profit40000Add: Outstanding gas payment800072000To Sundry Expenses170000Less: Prepaid Rent44000126000To Depreciation96000To Net Profit (loss)-254000Total40000Total4000Balance Sheet: It is a statement which describe about the financial position of companyincluding valuable assets, liabilities and equity of business owner within a specific accountingyear. This gives a realistic comparison for two continuous year (Ellwood and Newberry, 2016).It helps the management to maintain a valid record of business performance and help todetermine the ways which support to raise the finance and mark the areas which need to beimproved. A balance sheet is a financial statement that contains information about liabilities,assets and equity of a organization. It is temporary, several financial ratios depend oninformation should include in both the financial statements as well as the more vibrant cash flowstatement and income statement to create a much more comprehensive image of what ishappening to the business.Balance Sheet as on 31st April,2019LiabilitiesAssetsCapital960000Furniture and Fittings480000Less: Drawings110000Less: Depreciation96000384000Net Profit-254000596000Trade Receivables160000Bank Overdraft80000Inventory100000Outstanding Wages20000Prepaid Rent44000Outstanding Gas payment8000Other Current Assets16000Total704000Total704000Question 2Statement of profit & loss: 2
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