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Unit 10 financial accounting assignment

   

Added on  2021-02-19

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UNIT 10 AND FINANCIALACCOUNTING
Unit 10 financial accounting assignment_1

Table of ContentsINTRODUCTION...........................................................................................................................1BUSINESS REPORT......................................................................................................................1Financial Accounting: Purpose...................................................................................................1Stakeholders................................................................................................................................2CLIENT 1........................................................................................................................................3Journal Entries.............................................................................................................................3Cash Book...................................................................................................................................5Nominal Ledger..........................................................................................................................5Purchase Ledger........................................................................................................................11Trial Balance using Balance-Off Rule......................................................................................11CLIENT 2......................................................................................................................................12CLIENT 3......................................................................................................................................141. Purpose of preparing Bank Reconciliation Statement..........................................................142. Reason for difference between balance of bank column of cash book and bank statements143. Imprest...................................................................................................................................15Application of Bank Reconciliation Process.............................................................................15CLIENT 4......................................................................................................................................15Process to reconcile Control Accounts.....................................................................................153. Control Account....................................................................................................................16CLIENT 5......................................................................................................................................161. Suspense Account and its main features:..............................................................................16CONCLUSION..............................................................................................................................17REFERENCES..............................................................................................................................18
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INTRODUCTIONIn present business scenario, the process of preparing annual accounts that are used byinternal and external parties of business in order to make meaningful decision is knows asfinancial reporting. Financial accounting procedure includes reporting of each financial dealingso that final accounts are prepared to define the predefined objective (Barth, 2015). It isdescribed that reporting is primary characteristic of financial accounting that aid to define theactual financial position and overall performance of company to stakeholders. In this project report a complete explanation and aim of financial accounting, internal orexternal stakeholders, main intent of bank reconciliation statement and control accounts. Apartthis detail description of suspense and Imprest account and its primary characteristic arediscussed in this report. BUSINESS REPORTFinancial Accounting: PurposeThe concept of Financial Accounting is mainly concerned with keeping track of thefinancial transactions undertaken by a particular business entity. This is ensured by employingstandardized guidelines on the basis of which transactions of varying nature are identified,recorded, classified, summarised and then reported in a financial report (Bebbington, Unermanand O’DWYER, 2014). These financial reports are usually known as Annual Reports thatcontain the final accounts or statements of a business enterprise for a given time period. The main purpose of Financial Accounting is to provision sufficient information forvarious internal as well as external parties for whom such subject matter is of great importance.This helps such parties to assess the value of company in a discrete manner and enables them toreach important conclusions for present as well as future investment purposes. Due to this fact,the discipline of financial accounting consists of guidelines that are generalised all around theworld in the form of Accounting Standards (AS) as well as Generally Accepted AccountingPrinciples (GAAP). Apart from this, the company is also able:To plan and forecast its future strategic moves by analysing such information gained for aparticular accounting year. To ensure conformity to various standardized guidelines by maintaining proper book-keeping systems.1
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To measure financial performance and profitability in monetary terms.To facilitate important decisions in regards to taxation, liabilities and other such matters.To compare the performance on industrial as well as competitive lines that help the top-management in knowing their key strengths and weaknesses.To identify various points of competitive advantages that are posessed by the business.StakeholdersStakeholders may be defined as those parties who are largely impacted by the actions ofan organisation for various reasons. These actions mostly include policies, current as well asfuture objectives among others (Bryer, 2012). Stakeholders may be internal and external. It isimportant to note that not all stakeholders are equal. These have been discussed as under:Internal Stakeholders:These are those parties or entities that are directly engaged within a business. For instance,employees and board of directors are two of the main types of internal stakeholders. Employeesare those which are mainly involved in the execution of strategic goals and objectives in adefinite manner. On the other hand, Board of Directors are those who are directly involved inthe formulation and overlooking the operations so as to ensure that the predefined action plansare carried out in a manner that result in achievement of goals. Hence, by coordinating andcooperating together, internal stakeholders are able to carry out the operations of the businessprofitably.External Stakeholders:These are those parties or entities that are not directly engaged within a business. For instance,government, customers, regulatory bodies and investors are fourof the main types of externalstakeholders. Government is one that is resposible for creation of policies that govern theinternal as well as the external business environment in which a company operates. Hence,information derived from financial accounting can help in the ascertainment of tax sheilds andtax liabilities in an effective manner. Customers are those stakeholders which directly impactthe profitability of the business. Hence, they are interested in knowing how transparent thecompany is in its operations and whether or not it is socially aware regarding its activities(Chiang, Nouri and Samanta, 2014). Regulatory Bodies are interested in knowing how well thecompany is able to conform with the various rules and guidelines that relevant to a particular2
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organisation. Investors are interested in knowing how profitable it is for them to earn rewards inthe form of dividends from current as well as future perspective.CLIENT 1Journal EntriesDateParticulars.....DebitCredit01/01/19Premises A/c 240000Motor Van A/c51250fixtures A/c8100Inventory A/c23900P Mullen A/c4400F Lane A/c6100Bank A/c68400Cash A/c15600To S Hood A/c12150To J. Brown A/c16600To Capital A/c (Balancing Figure)389000(Being Owner's Capital is calculated )Therefore, Alexandra Study's Capital at 1st January= £ 389000DateParticularsDebitCredit01/01/19Storage cost A/c450To bank A/c450(Being storage cost is paid)02/01/19Purchases A/c 7680To S Hood A/c1450To D Main A/c2060To W Tone A/c960To R Foot A/c1610(Being goods purchases on credit from various parties)03/01/19J Wilson A/c 1200T. Cole A/c1650F. Syme A/c 2100J. Allen A/c 1020P. White A/c 2520F Lane A/c 980To Sales A/c94703
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(Being goods sold on credit to various parties)04/01/19Motor Expenses A/c 470To Cash A/c470(Being motor expense is paid)07/01/19Capital A/c1500To Cash A/c1500(Being cash withdrawal by owner himself)09/01/19T. Cole A/c680J. fox A/c1310To Sales A/c1990(Being goods purchase on credit with various parties)11/01/19Sale Return A/c680To J. Wilson A/c270To F. Syme A/c410(Being goods is returned back by the parties16/01/19Bank A/c7020To P. Mullen A/c1400To F. Lane A/c3100To J. Wilson A/c850To F. Syme A/c1670(Being Payment received from various parties)19/01/19R Foot A/c50To Purchases Return A/c50(Being Goods is returned to creditor) 22/01/19Purchases A/c3740To L Mole A/c1830To W Wright A/c1910(Being goods purchased on credit)24/01/19S Hood A/c3600J Brown A/c4600R Foot A/c1400To Bank A/c6000(Being payment is made to creditors)27/01/19Salaries A/c48004
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