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Assignment on Financial Statements : Peter Piper and Raintree Limited

   

Added on  2020-06-05

31 Pages3073 Words149 Views
Financial Reporting

Table of ContentsINTRODUCTION ..........................................................................................................................3A) Explain the different terms of financial accounting...................................................................31.Financial accounting ...............................................................................................................32.Financial accounting regulations..............................................................................................33.Accounting rules and principles...............................................................................................44. Convention and concepts regards to material disclosure and consistency..............................5B) Preparation of accounting for the various type of business........................................................5Client 1 Alex Study.....................................................................................................................5...................................................................................................................................................17Client 2 (Case of Peter piper case)............................................................................................19Client 3 ( Raintree limited) ......................................................................................................22Client 4 (Kendal limited and bank statement case study) ........................................................25Client 5 ( Henderson) ...............................................................................................................26Client 6 ( Suspense account concept) .......................................................................................28REFERENCES..............................................................................................................................30

INTRODUCTION Financial accounting is most vital tool and techniques that are adopted by the company tomake financial decision regards to firm. It also helps them to make comparison of financialposition through the previous year net profit with the current sales profits. The financialstatement is prepared by the most of the accountants as per the accounting principles andguidelines is (GAAP) Generally Accepted Accounting principles (Abdul and et al.,2016). Thepresent assignment there is a preparation of financial statements for the Peter Piper and Raintreelimited for the ending of year 2016. Thereafter, there is also a preparation of bank statement forthe Kendal Limited has been also discussed. A) Explain the different terms of financial accounting1.Financial accounting It is the procedure of preparation of financial statement of a Company for a particulartime period that shows their financial performance. The statement that are mainly involves in itare profit-loss accountant, Balance sheet and cash flow statement. The main aim of preparingfinancial accounts is to deliver information about the firm's financial position to the externalparties. These are creditors, investors, shareholders, suppliers, government and customers theyaccess financial data of a company for some purpose. In other words the financial accounting isthe process of records, classified and summarised the business transaction in terms of monetary.They are mainly used for the purpose of tracking the financial transaction that shows the trueview of financial position of a company. It is a composition of several reports and tools whichshows the accurate economic position and also produce various ideas to deliver the better qualityof services. 2.Financial accounting regulationsThere are various financial tools that are adopted to prepared the financial statement of acompany for the purpose of identification of their financial position. There are various regulatorybody that shows the provisions and guidelines of accounting principles. These are described asfollows:- Accounting Standard board:- The main aim of accounting standard board is that toprepare the financial statement of a company as the accounting standard (Aizenman,Chinn and Ito, 2016). There are various provisions and guidelines which are mainlyprovided to record the financial statements accurately and fairly. Thus, according to this,

various application and tools are applied to prepared the financial statement as per theaccounting standards and guidelines. International financial reporting council:- It is that type of regulatory body ofaccounting of UK which ensure the corporate governance quality. It is mainly providesthe oversight, corporate reporting and maintain all the accounting standards etc(Anderson,2016). It is constitutes of standard committee, conduct committee andExecutives committee etc. Thus, financial statement is prepared as per the variousregulation of IFRC and it applied disciplinary activities that shows company's incomeand expenditure. 3.Accounting rules and principlesThere are several accounting rules and principles of a company that are mainly providedthrough the GAAP and FASB that must be followed by the Company at the time of preparationof financial statements. It has been described as follows:- Cost principle: It is that type of principle that are defines as per the accountingviewpoint it is that type of cost when the company incurred at the time of purchasing aninventory (Barron,Chung and Yong, 2016). Thus, it will be shown in the financialstatement of a company as a cost of product. Going concern principles: It is that type of principle of an accounting that makeassumption that the Company is continuously operating in the future foreseeable. It is thattype of principles that are applicable for the banking institution, those who supply creditand company that traded publicly. Conservatism: It is that type of accounting principle that guide the company to recordthe events that are uncertain and make estimation (Barth,2015). Thus, several times itreduces the firm's profits through record of uncertain expenses and not record theestimated gains. Full disclosure principles: It is that type of principle that are needed for a business todeliver the essential information. It helps the people to read out the financial data thatassist them make decisions that are informed regard to firm (Bazley and et al., 2013).Thus, the information is to be disclosed in documents notes to the financial statement andunder the fiscal statement of an organisation.

4. Convention and concepts regards to material disclosure and consistencyConvention of disclosure: It is that disclosure all the necessary data that is one of thevital accounting convention. It is prepared accounts statement in that way in which thereis an all material information will be disclosed clearly (Beatty and Liao, 2014). Thus, itwill be disclosures under the regulatory body of financial accounting in the boarddirectors meeting. Convention of consistency: It is that type of principle in that there is same accountingprinciple administration that are used for the purpose of preparation of financialstatements for the several time period. B) Preparation of accounting for the various type of businessClient 1 Alex Study1.The book of prime entry: Most of the firm prepare their prime entry of book that mainlyinvolves variety of record that representing various type of business. The financialinformation are to be recorded at the general level that involves sales return book, bankbook, day book and petty cash book. Thus, according to this financial statements of abusiness entity is prepared that are profit-loss account statement, balance sheet and cashflow statement. Therefore, the books of prime entry that shows for a specific firm throughpreparation of each individual accountant. 2.Complete double entry recording: The double system is used by the accountant toprepare the journals and ledger entry. Thus, each financial transaction are recorded in thefinancial statement on both side debit and credit. Thereafter, it will be directly recordedinto the ledger of both sides. There is a needed to record financial transaction on bothcredit and debit side equally at the prime level (Evans, 2015). In the financial terms as perthe accounting standards the credit amount can be expressed as' to' and the amount ondebit side it is expressed as 'by'. There are various types of accounting statement preparedthat are purchase journals, sales journal, sales return journals and purchase return journaletc.

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