Financial Accounting Principles: Client Project Analysis Report

This project report provides a comprehensive overview of financial accounting principles, encompassing journal entries, ledger postings, and trial balance preparations. The report analyzes financial statements, including profit and loss statements and balance sheets, for various clients. It delves into key accounting concepts like depreciation, bank reconciliation, and ledger control accounts, alongside the application of these principles through detailed examples and calculations. Furthermore, the report examines the purpose and advantages of using these accounting tools, such as ledger control accounts and suspense accounts, offering a practical understanding of their role in financial data management and reporting. The report also includes a conclusion and references to support the analysis and findings.

Financial Accounting
Principles
Table of Contents

INTRODUCTION...........................................................................................................................1
PART A...........................................................................................................................................1
1. Concept of financial accounting ........................................................................................1
2. Legislation and rules that are use in accounting ................................................................1
3. Principles and accounts .....................................................................................................1
4. Convention and concepts of accounting ............................................................................2
PART B............................................................................................................................................3
CLIENT 1........................................................................................................................................3
Journal entries.........................................................................................................................3
Posting it into ledger...............................................................................................................8
Trail balance.........................................................................................................................13
CLIENT 2......................................................................................................................................14
a): Statement of profit and loss for peter piper.....................................................................14
b): Statement of balance sheet..............................................................................................15
CLIENT 3......................................................................................................................................16
c): Concept of accounting principles....................................................................................16
d): Purpose of using depreciation in formulation of financial accounting...........................17
CLIENT 4......................................................................................................................................18
a): Purpose of Bank reconciliation statements and difficulties............................................18
b): list of some records that are varies .................................................................................19
c): Calculation......................................................................................................................19
CLIENT 5.....................................................................................................................................20
a): Ledger control accounts..................................................................................................20
1: Sales ledger control a/c.....................................................................................................20
2: Purchase ledger control a/c...............................................................................................21
b): Advantage of using ledger control account ....................................................................21
CLINET 6......................................................................................................................................22
a): Suspense a/c....................................................................................................................22
b): Trail balance....................................................................................................................22
c): Journal entry....................................................................................................................22
d): Comparison among suspense and clearing account .......................................................23

CONCLUSION..............................................................................................................................23
REFERENCES..............................................................................................................................24

INTRODUCTION
Financial accounting is a systematic recording of accounting data those are collected
from daily transactions of an organisation. It is essential aspects for every business organization
whether small or large. There are require a perfect accounting system to manage there financial
data in perfect manner (Weil, Schipper and Francis, 2013). This project report include certain
rule and regulation those are applicable in recording of entries into the books of account.
There are certain principles and convention those are helpful in posting transactions into
various statements those are made by the accountant. The primary objective of using financial
accounting is to prepare accurate and reliable information in order to increase profitability of the
company. Certain statements that are use for the purpose of recording and analysing data are
clearly utilise under this project.
PART A
1. Concept of financial accounting
Financial accounting is systematic recording of financial transaction those are done
during the time. This consists of recording, summarising and analysing performance of an
company with these statements (Edmonds and et. al., 2013). While, it is use to prepare the same
in order to determine materiality, comparability and reliability of the company.
2. Legislation and rules that are use in accounting
Accounting regulation are one of the important record which are issue by institution on
regularly basis. Basically, it is disclosure of financial performance by using these statements.
There some useful advantage of using regulation to improve credibility and reliability those are
relies on specific theory and concepts. Types of accounting regulation:
 Disclosure of statements.
 Content standards.
 Presentation standard.
 Privately set rules and practices.
3. Principles and accounts
It has been seen that to record financial transaction in more perfect manner they need to
use more certain rules and procedure that are helpful in systematic record of data. It is known as
1

measurement processing and evaluation of financial information regarding performance of
economic entity. Some of them are:
 Personal accounts: Debit the receiver and credit the giver
 Real a/c: Debit what comes in, credit what goes out.
 Nominal: Debit all expenses and losses or credit all income and profits.
Principles:
Accrual principles: It is refers to be the perfect concepts which is use to record all those
information that must be recorded in a accounting time when they actual occur. Not at that time
when cash-flows are incurred.
Conservatism: According to this particular concepts, all those expenses and debts must
be converted into one accounting period (Macve, 2015). This will be termed as a conservatism, if
financial details are occur at very minimum gain for the company.
4. Convention and concepts of accounting
Every business entity need to follow some specific accounting practices which are helpful
for the manager to record transaction into the books of accounts. Some conventions are:
Convention:
Money measurement: In every organisation, manager need to record every transaction
which are incur only in terms of financial and non-financial terms. It involves workforces skills,
market leadership and many more.
Separate entity: As per this concepts, accountant must ensure that all transactions
perform by company's are require to be individually recorded.
Materiality: It is known as important parts of convention that are profitable for the
company in order to follow basic principles for the purpose of making valuable decision-making.
Concepts:
Going concern: Under this, managers make an assumption about the information until
there is not any perfect evidence. It is a regular process which is being followed by the company
for longer period of time.
Cost basis: All those assets must be enter in the accounts books on its actual cost paid to
the company and not at current market value.
Entity: It reflect the annual recording of activities of a particular business organization.
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PART B
CLIENT 1
Journal entries
3

4

5

6

Posting it into ledger
7

8

9