Financial Accounting Principles: Ledger, Statement, and BRS Analysis

This report delves into the core principles of financial accounting, beginning with the application of the double-entry bookkeeping system to create general ledgers for sales and purchase transactions. It then proceeds to the construction of trial balances using the balance-off rule, followed by the preparation of final accounts, incorporating adjustments for depreciation and prepayments. The report further analyzes financial statements and includes a detailed examination of bank reconciliation statements (BRS). It also covers the framing of sales and purchase ledgers for a specific period, the evaluation of control accounts, and an explanation of suspense accounts, including their features, trial balance, journal entries, and a differentiation from clearing accounts. Furthermore, the report explores the different kinds of accounts and the construction of reconciliation methods, and it concludes by generating adequate accounting methods for measuring the financial performance of a business.

FINANCIAL
ACCOUNTING
PRINCIPLES

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
P1 ....................................................................................................................................................1
Applying double entry book keeping system of debit and credit. Frame general ledger with
transactions of sales and purchase...............................................................................................1
P2...................................................................................................................................................11
Producing trial balance by applying use of balance off rule.....................................................11
P3 ..................................................................................................................................................12
Preparing final accounts with reference of figures of trial balance by adjusting depreciation
and prepayments.......................................................................................................................12
P4 ..................................................................................................................................................17
Analysing Financial statements with BRS................................................................................17
P5...................................................................................................................................................18
A. Framing sales and purchase ledger for the year 2017 (May) of Henderson........................18
B. Evaluation of Control accountant.........................................................................................21
P6...................................................................................................................................................21
A. Explaining suspense account with features..........................................................................21
B. Drafting Trial balance...........................................................................................................21
C. Journal entries.......................................................................................................................22
D. Differentiate between Suspense account and Clearing account ..........................................22
M4 Kinds of accounts and construction of reconciliation........................................................23
D4 Generating adequate accounting methods...........................................................................23
CONCLUSION..............................................................................................................................24
REFERENCES..............................................................................................................................25

INTRODUCTION
Financial accounting is very essential component of each and every organization
especially its principles. Each and every industry has its major use for generating the adequate
return with context of finance and operations of the business. The present report is giving brief
understanding on different accounts such as sales ledger control account and purchase ledger
control account of client 5. Further there is brief understanding about suspense account with its
essential features and its trial balance with proper justification. There are different ways for
fetching the important information for taking appropriate decision regarding profitability. For
measuring profitability and performance there are different financial statements like income
statement, balance sheet, cash flow for analysing different operational task as well.
P1
Applying double entry book keeping system of debit and credit. Frame general ledger with
transactions of sales and purchase.
The double entry book keeping system of debit and credit has been disclosed below by
extracting balance sheet and Income statement of may 2017 of Alexander (Kwok, 2017). With
the help of different accounting techniques in the given duration with transactions are briefed as
follows :
1

2

General Ledger
3

All transactions are included in journal entry of the given dataset. Each account has their
own entries. The cost and gain has been analysed from different sources of all activities by
managers and owners with operation of organization by observing journal entries. The journal
entries plays very significant role in reducing different level of expenses and cost related to
organization.
4

5

6

7

Nominal Ledger
8

9

Real ledger accounts
Journal entries
Assets Dr Cr
Premises 340000
Fixtures 8100
Investments 63900
Van 51250
10