Financial Accounting and Reconciliation
Added on 2020-10-22
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Financial accounting
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1Question 1........................................................................................................................................1Preparation of final accounts of the sole trader......................................................................1Question 2........................................................................................................................................4Producing final accounts of organisation...............................................................................4Question 3........................................................................................................................................7Explaining Bank Reconciliation Statement and terms...........................................................7..........................................................................................................................................................7Question 4........................................................................................................................................8Explaining how suspense account and control account are reconciled .................................8CONCLUSION................................................................................................................................9REFERENCES..............................................................................................................................10
INTRODUCTIONFinancial accounting is quite useful branch dealing in recording daily transactions ineffectual manner. Present report deals with importance of financials in organisation. The finalaccounts of sole trader and company both are prepared for the past year from trial balance given.Thus, it can be said financials play crucial role in firm as it helps to assess financial performancewith much ease. Furthermore, bank reconciliation statement is prepared along with various termsare taken into account in effective way. Moreover, discussion has been made regarding suspenseand control account and how they are reconciled. Question 1Preparation of final accounts of the sole traderIncome statement for the year ended 31April 2018ParticularsAmountRevenue140000Less: Cost of Sales80000Gross profit60000Operating expendituresSundry expenditures3600Add: Rent paid in advance44008000Wages44000Outstanding Wages6400Gas payment outstanding800Heat and light expenditures8000Depreciation on fixture and fittings4800Total operating expenditures720001
Operating profitEBT-12000Tax-Net loss-12000Balance sheet as at 31 April 2018AmountCurrent assetsTrade receivable16000Stocks20000Rent paid in advance4400Total current assets40400Furniture and fixture48000Less: Depreciation480043200Short-term investments8800Total assets92400Liabilities and shareholders' equityLiabilitiesCurrent liabilitiesOutstanding Wages6400Gas payment outstanding800Bank overdraft (OD)8000Total current liabilities15200Total liabilities30400Shareholders' equityCapital740002
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