Introduction to Financial Accounting: Assignment

Introduction to
Financial Accounting

INTRODUCTION
Financial accounting is an important part in any business. Financial accounting is the
process of recording, summarizing, and reporting the transactions which takes place in business
in a day to day life (McCarthy, Shelmon and Mattie, 2012). Reporting includes the preparation of
cash flow statements, balance sheet statements and statements of profit and loss. This helps the
managers to know the actual position of the company and take the necessary decisions which
helps the organisation to achieve its organisational goal. Financial accounting also helps the
managers to track the funds that whether they are properly utilized or not. With the help of these
financial statements top level management can compare their performance and see their growth.
In this report various accounting concepts are used in order to prepare the financial
reports of Conga, a small toy retailer sole trader business. Concepts such as prudence concept,
accrual concepts are used to prepare the final reports.
TASK 1
Preparation of accounting records and financial statements.
Journals:
 Credit and cash Purchase entries
5 purchase entries
S.NO. PARTICULARS DEBIT CREDIT
1 Purchase a/c 25000
To Oliver a/c 25000
2 Purchase a/c 9000
To Smith a/c 9000
3 Purchase a/c 15000
To William a/c 15000
4 Purchase a/c 38000
To David a/c 38000
1

5 Purchase a/c 40700
To Josh a/c 40700
3 Expenses paid in cash
S.NO. PARTICULARS DEBIT CREDIT
1 Wages a/c 62000
Cash a/c 62000
2 Rent a/c 5000
Cash a/c 5000
3 Electricity a/c 8000
Cash a/c 8000
 Return outward entries
S.NO. PARTICULARS DEBIT CREDIT
1 Smith a/c 3000
To Return outwards a/c 3000
2 Josh a/c 9000
To Return outwards a/c 9000
 Payment to Trade Payables
S.NO. PARTICULARS DEBIT CREDIT
1 Accounts payable a/c 19000
To cash a/c 19000
2 Accounts payable a/c 9900
To cash a/c 9900
 Credit and Cash Sales entries
5 credit sales
2