Financial Accounting Report: Client Financial Analysis and Statements

This report provides a comprehensive analysis of financial accounting principles and their practical application through various client case studies. It begins with an introduction to financial accounting, covering reporting regulations, the description and analysis of financial accounting, and the determination of accounting principles and concepts. The report then delves into six client scenarios, each presenting different aspects of financial accounting. Client 1 focuses on journal entries, ledger accounts, and trial balances. Client 2 presents profit and loss statements and balance sheets. Client 3 includes income statements and financial position analysis. Client 4 examines bank statements and reconciliation. Client 5 analyzes sales and purchase ledgers, while Client 6 covers suspense accounts and trial balances. The report also explores depreciation methods, the importance of financial statement analysis, and the application of accounting tools and techniques, concluding with a discussion of the importance of accurate calculations in constructing final accounts and the production of adequate accounting methods.

Financial Accounting

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
A. Reporting the accounting regulations for firm to the Line manager.................................1
1 Describing the financial accounting....................................................................................1
2 Analysing the financial accounting regulations..................................................................2
3 Determining the principles and necessary rules for accounting..........................................3
4 Explaining the concepts relevant to the material disclosure as well as consistency...........4
CLIENT 1........................................................................................................................................4
1. Preparing the Journal account for Client 1 for the date 1st May 2017...............................5
2. Ledger accounts of all the Journal entries..........................................................................7
3 Trail balance for client 1....................................................................................................16
M1 Analysing purchase and sale transactions to compile a trial balance............................16
D1 Presenting the accurate trail balance in consideration of accounting principles............17
CLIENT 2......................................................................................................................................17
A Profit and loss statement for Peter Piper for the year 31st December 2017.....................17
b Presenting the balance sheet for Peter Piper for the period 31st December 2017.............18
CLIENT 3......................................................................................................................................19
A Income statement for Raintree Ltd for the period 30th September 2017.........................19
b. Financial position of Raintree Ltd....................................................................................20
c Determining principles and concepts of accounting..........................................................25
C Analysing the importance of measuring and presenting depreciation in the financials of
business as well as describing the two methods for business...............................................26
M2 Analysing the P&L, balance sheet and cash flow statements........................................26
D2 Application of the accurate calculations in construction of the final accounts..............26
CLIENT 4......................................................................................................................................27
A Purpose behind preparing the bank statement..................................................................27
B Determining the causes of recording such bank statements or records............................27
C Cash books for the client..................................................................................................27
M3 Application of the reconciliation process and demonstrating various terms.................28
D3 Preparation of BRS in consideration of accounting tools and techniques......................28

CLIENT 5......................................................................................................................................29
A Preparing the sales and purchase ledger account for Henderson for the period May 201729
b Evaluating the term Control account.................................................................................29
CLIENT 6......................................................................................................................................30
A Suspense account and its main features............................................................................30
b. Presenting the trail balance...............................................................................................30
c Journal entries....................................................................................................................30
d Determining the difference between Clearing and suspense account...............................31
M4 Types of accounts and construction of reconciliation....................................................31
D4 Producing the adequate accounting methods..................................................................31
CONCLUSION..............................................................................................................................32
REFERENCES..............................................................................................................................33
BIBLIOGRAPHY..........................................................................................................................35

INTRODUCTION
In the current scenario there has been use of various accounting principles rules and
regulation which in turn are beneficial for industry or organisation in analysing the adequate
requirement of funds to perform the business activities. Thus, in the present assessments there
will be study based on various principles concepts of financial accounting as well as presentation
of various accounts which are helping various clients to fetch the essential informations and
validate them to make favourable decisions. However, such analysis will be beneficial for
analysing the profitability of the firm through various financial statements such as income
statements, balance sheets, cash flow statements as well as adequate analysis of the operational
tasks.
A. Reporting the accounting regulations for firm to the Line manager
To: Line Manager
From: Junior accountant
Subject: Implication of the accounting terms as well as awareness which are relevant with such
accounting regulations.
Sir,
In order to improve the transactional activities of the business there is need to analyse
the usage, rules, regulations and methods of various accounting principles. Thus, such
accounting techniques will help the organisation in making appropriate improvements in the
business operations as well as make the adequate transactional activities (Robson, Young and
Power, 2017). However, there has been use of various accounting techniques which in turn
helps the business in making the fruitful plans for budgeting, forecasting and costs allocations
over various operational tasks of the business.
1 Describing the financial accounting
In consideration with financial analysing the company's accounts which in turn helps in
improving the investments, capital structure or the business operations of the firm in the long
run. However, with the help of such techniques organisations will help in building the
appropriate reputation in the current environment. Thus, there will be preparation for financial
statements such as income statements, balance sheet as well as stakeholder analysis for firm.
Hence, the motive behind such operational activity is that they help in enhancing the
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profitability, productivity as well as presenting the appropriate disclosure of such financials in
the market thereby it helps in gathering the large numbers of stakeholders.
Illustration 1: Kinds of financial statements
Source :(Zeff, 2016)
However, there has been various kinds of financial accounting which in turn helps in
presenting the financials of the business. Hence, such informations are to be used by External
stakeholders of the firm such as Shareholders, governmental departments as well as various
financial institutions like banks thereby analyse the annual turnover, taxation paid by the
government as well as the improvements in organisational growth.
2 Analysing the financial accounting regulations
There has been various operational activities in the business so the record of each and
every transaction is the prime requirements of the organisation. Thus, financial accounting is
consists of various rules and regulations which in turn helps in providing the legal framework of
the accounting. Hence, UK's corporate reporting and governance regulator has facilitated FRC1
which in turn regulates the financial reporting disclosure of the government departments, units
and various corporates (Regulation in Financial accounting, 2017). It helps in facilitating the
auditing of such accounts as well as improve the trade and business in the national economy.
However, there has been various regulations which are executing the universally accepted legal
framework of presenting the dataset such as:
FRC: In consideration with such accounting standard which are constituted for
monitoring and executing the financial disclosures made by various corporations of UK to
1 Financial Reporting Council
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promote the high quality governance (Financial Reporting Council, 2017).
IASB2: The main motive of such board is to facilitate the adequate information and
guidelines to accounting professionals in context with preparing financial data base as well as
facilitate appropriate disclosure of such accounts. Thus, such legal framework has set the
criteria of financial disclosure which is worldwide accepted format and helps the organisation in
attracting the international investors (Loughran and McDonald, 2016).
IFRS: There has been informations and framework which are relevant with making the
disclosure of such financial statements that are helpful for the business in attracting the large
numbers of investors and it helps in making the beneficial estimation of the costs and the
relevant expense incurred in the operational activities.
3 Determining the principles and necessary rules for accounting
There has been various principles and concepts which are being facilitated by GAAP in
order to bring the logically accepted guidelines to the framework of accounting techniques used
by various organisation (Accounting Principles, 2017). However, there has been various
accounting principles which helps in providing the fruitful guidance to accounting
professionals, some of them are described below:
Monetary unit assumption: In consideration with making the business transactions
which are need to be in the US dollar cause this currency is universally accepted and have the
stable rate with fewer fluctuations (Dung, 2016).
Economic assumptions: There has been golden rule that consists of the rule that tall the
entity or firms which are operating in the market and having the revenue through trade practices
can be denoted as the septate legal entity and they have their own legal identity as well as
denoted as a person itself.
Cost principle: this are the techniques which is beneficial of the organisational
professionals in analysing the requirements of the costs that are known as the amount spent over
the operational activities. Hence, such costs or expense are to be budgeted and to be appropriate
to meet the trade requirements.
Full disclosure principles: This concept lies on the rule that during the financial year
2 International Accounting Standard Board
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the business keeps all the records of various transactions of different departments or units of the
organisation must be audited, complied as well as present the single statement of balances.
Hence, it can be said that all the accounts of the business must be disclosed at the end of such
financial period. There must be disclosure of the income statements, financial position and cash
flow statements of very operating firm.
Going concern Principles: This principle lies over the concept that all the company
which are performing in business will have the adequate growth as well as make the fruitful
disclosure of the accounts. Hence, which are need to be on the going or regular process
(Damodaran, 2016).
Materiality: There has been use of various financial data which are need to have the
authenticated sources as well as make the efforts in facilitating the relevant material.
4 Explaining the concepts relevant to the material disclosure as well as consistency
In terms with the conventions or concepts of the financial accounting there has been
various terms such as full disclosure, consistency, conservatism convention and materiality
(Grant, 2016). In order to understand the concepts being such principles there is need to make
the adequate disclosure of such accounts as well as understating these two concepts such as:
Consistency: This principle follows the nature that the organisation which has started
making trade practices in the market. It can be said that such business operations will have the
adequate consistency and have the fruitful profitability. Thus, it will be helpful for the firm in
gathering the profitable returns for the long period and facilitating the managers with adequate
operational outcomes.
Material disclosure: The disclosure of the financial accounts which are consists of
various material such as items are need to be monitored by the business professionals in context
with analysing the profitability and efficiency of the organisation in meeting such targets (Dutta
and Patatoukas, 2016).
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CLIENT 1
The present case study is relevant with the case of Alexandra where the various financial
balances are provided by client in context with measuring the Journals Ledger and trial balance
account of such financials.
1. Preparing the Journal account for Client 1 for the date 1st May 2017
In Order to present the disclosure of journal entries there is need to analyse the income
statement and the balance sheet presented by Alexandra for the period of may 2017. Hence, such
accounting techniques helps in recording all the transactions held in such period and thereby
facilitate the summarized transactional data set.
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2. Ledger accounts of all the Journal entries
This accounts are the separate transactional entries of all the terms or items which are
record in the transactional journal accounts. Hence, this helps the managers in analysing the costs
and gains obtained from various sources in terms with the operational activities of the business
(Crawford, 2016). However, such entries will help organisation in making plans or decisions
which will lower down the costs and expenses of business.
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8

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Sales Ledge accounts
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Nominal Ledger:
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Real Ledge accounts:
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3 Trail balance for client 1
These are the balances which are need to be calculated by the firm in context with various
journal and ledger entries. Thus, it can be said that such accounts are the summarized data set
which consists of all the balances of such transaction which are held in general accounts. Hence,
following is the trail account of Alexandra for the period of May 2017.
M1 Analysing purchase and sale transactions to compile a trial balance
In accordance with the various purchase and sales made during the period respective trail
balance were produced. On which the several assets were revalued such as premises, van, fixture
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and inventory. The sales for 10930 and the purchase is for 38320. Thus, it can be said tat the
sales are lower than the purchase. It seems like client has more expenses.
D1 Presenting the accurate trail balance in consideration of accounting principles
In terms with the accounting principles which are being issued by various institutions and
boards the respective trail balance was produces. The record of all the transactions were made
under the format and framework which are being produced by the IFRS, IASB and GAAP
principles and concepts.
CLIENT 2
In this case the various balance are being provided by the Client 2 Peter Piper for the
period 31st December 2017 which are need to be analysed in the financial statements such as
income statements and financial position for such period.
A Profit and loss statement for Peter Piper for the year 31st December 2017.
The profit and loss or the income statement will represent all the revenue and expense
made an individual over the period are to measured in the single data set which in turn helpful
for them in analysing the profitable gains and the costs of such operations.
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b Presenting the balance sheet for Peter Piper for the period 31st December 2017
The financial position of the individual or the corporations are to be analysed and
measured in consideration with the income statements and the relevant transactions held during
the period. Thus, there will be benefits of such transactions which helps the business in making
the adequate growth as well as analysing the equity or capital strength which helps in making the
operational efforts. However, the financial position of Peter Piper will be disclosed as follows:
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CLIENT 3
In this case the client Raintree Limited has facilitated the trial balance of various accounts
which are being transit during the period such as 30th September 2017 which are need to be
analyse and calculations will facilitate the P&L balance sheet, depreciation with the help of two
methods as well as the brief discussion over the accounting concepts such as Consistency and
Prudence.
A Income statement for Raintree Ltd for the period 30th September 2017.
In context with trial balances facilitated by client there has been calculations and
measurements of various income and expense due to sales and production as well as other
operational activities during such period.
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b. Financial position of Raintree Ltd.
The balance sheet of the Raintree Ltd were being prepared by considering the adequate
informations which are presented in the trail balance as well as income statements of the
business.
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c Determining principles and concepts of accounting
There has been various concepts which in turn helps organisation in preparing the various
accounts of the business are need to be in the authenticated formate which helps the business in
improving the operational activities as well as easily understand by every individual or
corporations in the world (Robson, Young and Power, 2017). Therefore, there has been two
concepts which are described as follows:
Consistency: It is assumed that the business will perform the operational activities on the
consistent way as well as make the adequate efforts which in turn helps in making the adequate
efforts. Hence, with the help of such principles the firm is liable to make the disclosure or
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forecasting of the costs on the regular basis. Thus, such disclosure will help them in attaining the
large attraction of stakeholders as well as make the adequate efforts for the future improvements.
Prudence: Under this concept the business will not estimate the amount of such
transactions held in the period but they make the adequate record of all the transactions and then
analyse the liabilities of business (Pratt, 2016). Therefore, it can be said that there will be need to
make the adequate efforts which in turn helpful for the business in understanding the core
principles and concept of such tasks.
C Analysing the importance of measuring and presenting depreciation in the financials of
business as well as describing the two methods for business.
Depreciation is the technique which is in turn helpful for the business in making the
adequate efforts as well as presenting the values of assets in the current time. Hence, the main
purpose of adding the depreciation in such statements is that these are the expenses of the firm as
well s are devaluation's of the assets from its purchase value. However, there has been use of two
methods such as:
Straight line method: This method used to determine the deprecation chargeable over the
assets on the default technique such as deducting the same or fixed amount of depreciation from
the assets for the rest of the period (Zeff, 2016).
Written down method: this technique used in measuring depreciation on the
proportionate increase in the value of depreciation charge as well as present the estimated
balance after completion of the useful life of such assets.
M2 Analysing the P&L, balance sheet and cash flow statements
In order to analyse the income statement of the business there were many transactions
which were recorded ad then produced the adequate balances for 10000 as the net profit.
However, there has been various profits and losses which were made and recorded and that in
turn brings the most appropriate balances.
D2 Application of the accurate calculations in construction of the final accounts
There has been use of the adequate format which presents the most satisfying balances of
all the transactions which were made during the period. Hence, in consideration with balance
sheet of the Raintree limited The current assets were recorded at initial level than fixed assets
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that bring total assets as 137000. However, after assets there has been transactions which are
relevant with current liabilities of business than there has been recording of shareholder's equity
which is 102000 and then it brings the total liabilities for 137000.
CLIENT 4
A Purpose behind preparing the bank statement
The main purpose behind presenting the bank statement for Kendal is that during the
period there has been various transactions were held and in order to understand the gains and
expenses there is need to have the adequate data set which in turn helps in understating the flow
of money (Loughran and McDonald, 2016). Hence, this account will be beneficial for the
business in making efforts as well as presenting the data in the form of disclosure.
B Determining the causes of recording such bank statements or records
There will e several reasons which in turn helps the organisation in analysing the various
factors which influence the reason behind recoding such bank transactions such as analysing the
outstanding cheques, deposit transit, dishonour of cheque, interest charged over the period etc.
(Dung, 2016).
C Cash books for the client
BRS:
Cash book:
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M3 Application of the reconciliation process and demonstrating various terms
Deposit in transit: This are the deposits which a company recorded as the cash such as
paper note, currency, coins, electronic transactions thus, such transaction will not be recorded in
the bank account till the date.
Outstanding Checks: This are the checks which are being issued by organisation in terms
of making the payments. Thus, the amount of the check will be reduced from the company's
account but it still not cleared by the bank. It reflects that the balance of bank account is more
than the company's account
Not Sufficient Funds Check: This are the check which are returned by the bank without
Writing it off due to less balance in the account of the account holder.
D3 Preparation of BRS in consideration of accounting tools and techniques
The BRS statement of client has been produced and presents the adequate balances which
in turn will be made in the consideration of various tools and techniques which in turn helpful for
analysing the adequate balance for such statemented. There has been measurements which are
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based on the consideration with the various financial accounts such as Comparative financial
statement, trend analysis, ratio analysis and the funds flow statement. Thus, such accounts need
to be considered and produced the adequate BRS statement.
CLIENT 5
A Preparing the sales and purchase ledger account for Henderson for the period May 2017
Sales Ledger Control Account:
Purchase Ledger Control Account:
b Evaluating the term Control account
These are the summarized from of accounts which are to be recorded in the individual
and separate accounts of the business. They are basically used for measuring the trade receivable
and payables of the firm (Damodaran, 2016). Thus, such accounting techniques are being used
by big corporations.
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CLIENT 6
A Suspense account and its main features
In terms of having the appropriate final results of the financial accounts the suspense
accounts were prepared which helps in allocating the balances of such accounts in the adequate
manner (Grant, 2016).
b. Presenting the trail balance
c Journal entries
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d Determining the difference between Clearing and suspense account
Illustration 2: Differences between Clearing and suspense account
Source: (Clearing V/s Suspense Account, 2017)
M4 Types of accounts and construction of reconciliation
In order with the various functions in the organisation there has been preparation of some
accounting techniques which in turn produced the adequate management of funds and operations
in the business. Therefore, there can be preparation of profit and loss account which in turn
presents the all the revenue and expenses made by organisation during the period. Balance sheet
reflects the assets and liability as well as the ability or company to meet the debts and pay the
shareholders.
D4 Producing the adequate accounting methods
There has been uses of various methods and techniques to produce the accounts and
bringing the adequate auditing of such accounts. Therefore, such transactions re need to be made
by business in terms of making the adequate returns as well as producing the favourable balances
to users of such financial data sets.
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CONCLUSION
On the basis of above report there has been discussion based on the various principles
and concepts of the accounting techniques which are need to be adopted by the organisational
professionals. Further report has also shed some lights over the various accounts such as profit
and loss, financial potions, BRS cash books, and various journal and ledger as per the presented
scenarios.
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REFERENCES
Books and Journals
Crawford, C. W., 2016. ACTG 201.05: Principles of Financial Accounting.
Damodaran, A., 2016. Damodaran on valuation: security analysis for investment and corporate
finance (Vol. 324). John Wiley & Sons.
Dung, N. V., 2016. Value-relevance of financial statement information: A flexible application of
modern theories to the Vietnamese stock market. Quarterly Journal of Economics. 84.
pp.488-500.
Dutta, S. and Patatoukas, P. N., 2016. Identifying Conditional Conservatism in Financial
Accounting Data: Theory and Evidence. The Accounting Review.
Grant, R. M., 2016. Contemporary Strategy Analysis Text Only. John Wiley & Sons.
Loughran, T. and McDonald, B., 2016. Textual analysis in accounting and finance: A survey.
Journal of Accounting Research. 54(4). pp.1187-1230.
Pratt, J., 2016. Financial accounting in an economic context. John Wiley & Sons.
Robson, K., Young, J. and Power, M., 2017. Themed Section on Financial Accounting as Social
and Organizational Practice: Exploring the work of financial reporting. Accounting,
Organizations and Society. 56. pp.35-37.
Zeff, S. A., 2016. Forging accounting principles in five countries: A history and an analysis of
trends. Routledge.
Online
Accounting Principles. 2017. [Online]. Available through
:<https://www.accountingcoach.com/accounting-principles/explanation>.
Clearing V/s Suspense Account. 2017. >.[Online]. Available through
:<http://www.technofunc.com/index.php/functional-skills2/cash-management/item/
clearing-v-s-suspense-account>.
Financial Reporting Council. 2017. [Online]. Available through :<https://www.frc.org.uk/>
PDF
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Regulation in Financial accounting. 2017. [PDF]. Available through
:<http://www.accountingtechniciansireland.ie/Files/Documents_and_Forms/
Advanced_Financial_Accounting_Sample_Chapter.pdf>.
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