Introduction to Financial Accounting

INTRODUCTION TO
FINANCIAL
ACCOUNTING

Table of Contents
INTRODUCTION...........................................................................................................................1
QUESTION 1...................................................................................................................................1
1. Accounting records and financial statements for Corr.:.....................................................1
Journal entries:........................................................................................................................1
Ledger accounts......................................................................................................................5
Corr Income Statement for the year ending 30 September 2019...........................................8
Statement of financial position...............................................................................................9
Trial Balance:.......................................................................................................................10
2. Reporting of assets is useful.............................................................................................11
3. Causes of difference in cash accounts and profit.............................................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................15

INTRODUCTION
In accounting term, the method that is used by companies to collect, record and calculate
revenue, expenses and receivables is known as financial accounting (Bushman, 2014). It mainly
includes the formulation of effective financial documents which are used by stakeholders,
suppliers, employees, customer, business owner to make valuable decision. In this report Corr,
sole trader company is selected that help to better understand the concept of financial accounting.
In companies accounting personnels prepares financial statements which includes P&L Account,
balance sheet and trial balance which are ultimately used by management for managerial and
financial decision-making. The whole process of financial accounting begins with journal entries
and books and leaders which end with fictionalisation of balance sheet.
In this report accounting records and financial statements for Corr are being prepared,
reporting of assets is useful for making decision and Causes of holding cash is elaborated.
QUESTION 1
1. Accounting records and financial statements for Corr.:
Journal entries:
Following are key accounting entries for September month's transaction in books of Corr, as
follows:
Sales on credit
S. No. Particulars Debit Credit
1 Mr Otis a/c Dr.
To Sales a/c
15000
15000
2 Mr Jack a/c Dr.
To Sales a/c
35000
35000
3 Mr Joe a/c Dr.
To Sales a/c
50000
50000
4 Mr Sean a/c Dr.
To Sales a/c
10000
10000
5 Mr Kawin a/c Dr. 25000
1

To Sales a/c 25000
Sales on cash
S. No. Particulars Debit Credit
1 Cash a/c Dr.
To Sales a/c
50000
50000
2 Cash a/c Dr.
To Sales a/c
35000
35000
3 Cash a/c Dr.
To Sales a/c
45000
45000
Returns inward
S. No. Particulars Debit Credit
1 Sales Return a/c Dr.
To Mr Kawin a/c
8000
8000
2 Sales Return a/c Dr.
To Mr Joe a/c
15000
15000
Receipts from trade receivables
S. No. Particulars Debit Credit
1 Cash a/c Dr.
To Trade Receivables a/c
15000
15000
2 Cash a/c Dr.
To Trade Receivables a/c
10000
10000
Purchases on credit
S. No. Particulars Debit Credit
1 Purchase a/c Dr.
To Alex Ronald a/c
30000
30000
2 Purchase a/c Dr.
To Adam a/c
10000
10000
2