Introduction to Financial Accounting - Assignment

Introduction to
Financial Accounting
Table of Contents
Table of Contents.............................................................................................................................2
INTRODUCTION...........................................................................................................................1

TASK 1............................................................................................................................................1
Preparation of records and financial statement of Conga............................................................1
TASK 2..........................................................................................................................................14
Prudence and accrual concept and their application within Conga...........................................14
TASK 3..........................................................................................................................................15
The way in which VAT could be recorded in the books and reports of Conga........................15
CONCLUSION..............................................................................................................................16
REFERENCES..............................................................................................................................17

INTRODUCTION
Financial accounting can be defined as the process of formulating final accounts and then
analysing performance of the company with the help of different aspects such as profit, losses,
income, cash, expenditures etc. It is vital for all the business entities to conduct it on regular
basis so that actual financial status of business can be monitored and strategies decisions can be
formulated for future period (Chiang, Nouri and Samanta, 2014). This project report is based
upon Conga which is a small sole trader of toys and established in UK.
Various topics are being covered under this assignment which includes preparation of
accounting records and financial statement, explanation of prudence and accrual concept,
application of both of them etc. Explanation regarding recording of VAT is also being covered in
this report.
TASK 1
Preparation of records and financial statement of Conga
There are various types of tools that are used to analyse financial performance of a
company. All of them are as follows:
Journal entries: All the transactions are recorded in journals because it helps to make sure
that all the transactions are correct or not (De Waegenaere, Sansing and Wielhouwer, 2015). All
the entries for Conga are as follows:
Date Particulars L.F. Amount
Dr. Cr.
01/12/18 Purchase a/c Dr. 12000
To Crystal a/c 12000
01/12/18 Purchase a/c Dr. 14000
To Jim a/c 14000
02/12/18 Purchase a/c Dr. 16000
1

To Kia a/c 16000
03/12/18 Purchase a/c Dr. 20000
To Aeron a/c 20000
04/12/18 Purchase a/c Dr. 19500
To Emily a/c 19500
05/12/18 Salary a/c Dr. 40000
To Cash a/c 40000
05/12/18 Repair a/c Dr. 5500
To Cash a/c 5500
06/12/18 Insurance a/c Dr. 3500
To Cash a/c 3500
07/12/18 Aeron a/c Dr. 2000
To return outward 2000
08/12/18 Emily a/c Dr. 1000
To return outward a/c 1000
09/12/18 Emily a/c Dr. 18500
2