Financial Accounting: Trial Balance and Financial Statements

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FINANCIAL ACCOUNTING
1

Contents
SCENARIO 1..............................................................................................................................................3
Answer 1.................................................................................................................................................3
ii).............................................................................................................................................................7
LEDGERS...............................................................................................................................................7
iii)..........................................................................................................................................................16
Trial Balance for the month of June......................................................................................................16
Answer 2...............................................................................................................................................18
Profit and Loss Account for the year ended 31st December, 2007.......................................................18
Balance Sheet as at 31st December, 2007..............................................................................................21
SCENARIO 2............................................................................................................................................24
Answer 1...............................................................................................................................................24
a)............................................................................................................................................................24
Bank Reconciliation Statements............................................................................................................24
As on 28th February 2017.....................................................................................................................24
Revised Cash Book (As per Bank Column)...........................................................................................25
b) Following terms has been explained below:......................................................................................26
Answer 2...............................................................................................................................................29
Journal Entries For Correction of the Errors..........................................................................................29
Suspense Account..................................................................................................................................32
References.................................................................................................................................................33
2

SCENARIO 1
Answer 1.
1 Journal Entries of the following Transaction
Date Particulars
Amoun
t(£)
Amoun
t(£)
1/6/201
6 Cash A/c Dr. 65000
To Capital A/c 65000
( Being Muhammad make investment of £ 65000 into a
business)
2/6/201
6 Purchases A/c Dr. 8000
To Vendors A/c 8000
(Being goods purchase on credit of worth of £ 8000)
3

7/6/201
6 Cash A/c Dr. 4000
To Sales A/c 4000
( Being goods sold in cash of worth of £4000)
8/6/201
6 Vendors A/c Dr. 4000
To Bank A/c 4000
(Being makes a payment of half of the goods purchased
on credit from vendor)
75
14/06/2
016 Insurance premium A/c Dr. 75
To Bank A/c
(Being insurance premium paid through Cheque)
4

12000
15/06/2
016 Sundry Debtors A/c Dr. 12000
To Sales A/c
( Being remaining stock sold on credit on worth of
£12000)
16/06/2
016 Purchases A/c Dr. 10000
To Sundry creditor A/c 10000
( Being goods are purchased on credit of worth of
£10000)
18/06/2
016 Computer A/c Dr. 3000
To cash A/c 3000
( Being computer equipment purchased in cash of worth
5

of £3000)
20/06/2
016 Rent A/c Dr. 150
To Bank A/c 150
(Being rent of January paid by cheque in June)
21/06/2
016 Cash A/c Dr. 10000
To Sales A/c 10000
( Being sales of half of the inventory in cash of £10000)
25/06/2
016 Cash A/c Dr. 100
To Bank A/c 100
(Beingwithdrawn £100 from bank and put it into petty
6

cash book.)
30/06/2
016 Stationary Expenses A/c Dr. 30
To Cash A/c 30
(Being make stationary expenses from petty cash tin of
£30)
116355 116355
ii)
LEDGERS
Dr. Cash A/C Cr.
Date Particulars Amount Date Particulars
Amoun
t
1/6/2016 To Capital A/c 65000 18/06/201 By Computer Equipment 3000
7

6 A/c
7/6/2016 To Sales A/c 4000
30/06/201
6
By Stationary Expenses
A/c 30
21/06/201
6 To Sales A/c 10000
25/06/201
6 To Bank A/c 100 30/6/2016 By Balance c/d 76070
79100 79100
1/7/2016 To Balance b/d 76070
Dr. Capital A/C Cr.
Date Particulars Amount Date Particulars
Amoun
t
30/06/201
6 To Balance c/d 65000 1/6/2016 By capital A/C 65000
65000 65000
8

1/7/2016 By Balance b/d 65000
Dr. Purchases A/C Cr.
Date Particulars Amount Date Particulars
Amoun
t
2/6/2016 To Vendors A/c 8000
30/06/201
6 By Balance c/d 18000
16/06/201
6
To Sundry
creditor 10000
18000 18000
1/7/2016 To Balance b/d 18000
9

Dr. Vendors( Creditor) A/C Cr.
Date Particulars Amount Date Particulars
Amoun
t
8/6/2016 To Bank A/c 4000 2/6/2016 By Purchases A/c 8000
30/06/201
6 To Balance c/d 14000
16/06/201
6 By Purchases A/c 10000
18000 18000
1/7/2016 By Balance b/d 14000
Dr. Sales A/C Cr.
Date Particulars Amount Date Particulars Amoun
10

t
30/06/201
6 To Balance c/d 26000 7/6/2016 By Cash A/c 4000
15/06/201
6 By Sundry Debtors 12000
21/06/201
6 By cash A/c 10000
26000 26000
1/7/2016 By Balance b/d 26000
Dr. Bank A/C Cr.
Date Particulars Amount Date Particulars
Amoun
t
30/06/201 To Balance c/d 4325 8/6/2016 By Vendors A/c 4000
11

6
14/06/201
6 By Insurance Premium 75
20/06/201
6 By Rent A/c 150
25/06/201
6 By Cash A/c 100
4325 4325
1/7/2016 By Balance b/d 4325
Dr. Insurance Premium A/C Cr.
Date Particulars Amount Date Particulars
Amoun
t
14/06/201
6 To Bank A/c 75
30/06/201
6 By Balance c/d 75
12