Financial Accounting: Journal Entries, Statements, and Concepts

This financial accounting assignment solution covers various aspects of financial accounting, starting with an introduction to financial accounting and its regulations, purposes, and stakeholders. It delves into journal entries, trial balances, and the preparation of financial statements, including profit and loss statements and balance sheets for different clients. The solution also examines accounting concepts like consistency and prudence, the purpose of depreciation, and the differences between financial statements of sole traders and limited companies. Furthermore, it addresses bank reconciliation statements, control accounts, suspense accounts, and the imprest system. The assignment provides detailed examples and calculations for each client, offering a comprehensive understanding of financial accounting principles and practices.

FINANCIAL ACCOUNTING

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
A) Regulation relating to accountancy in terms of rules, principles and conventions....................3
1) Financial accounting and its purposes:..............................................................................3
2) Examining the internal and external stakeholders of the organization..............................4
CLIENT 1........................................................................................................................................4
i...............................................................................................................................................4
ii. Trial balance.....................................................................................................................15
CLIENT 2......................................................................................................................................16
a. Preparing statement of profit & loss.................................................................................16
b. Presenting statement of financial Position of Munteanu Ltd...........................................17
C) Accounting concepts.......................................................................................................18
D) Purpose of depreciation in accounting statement............................................................19
E) Difference between the financial statement prepared by sole traders and the limited
companies.............................................................................................................................19
CLIENT 3......................................................................................................................................19
A) Purpose of preparing the Bank Reconciliation statement (BRS)....................................19
B) Determine the areas which causes record to vary from banks........................................19
C) Explaining the term Imprest in pretty cash system.........................................................20
d. Preparing updated cashbook and BRS............................................................................20
CLIENT 4......................................................................................................................................21
a............................................................................................................................................21
B) Examining the term Control Account..............................................................................22
CLIENT 5......................................................................................................................................22
A) Suspense account.............................................................................................................22
b. Passing entries for necessary corrections and clearing of suspense account....................23
CONCLUSION..............................................................................................................................24
REFERENCES..............................................................................................................................25

INTRODUCTION
Financial accounting refer to the statement that is prepared by the company to maintain
their financial statement to syndicate their company annual position in the market. In this
accounting statement, the transaction and entries are prepared, analysis, summarized and
prepared to reflect the financial position of their working to achieve various objectives (Pijper,
2016). The financial statement of the company are mainly based on the income statement, total
cash flows in the business and balance sheet which reflect the total working structure of the
company.
Present report will include the meaning of financial accounting and its various
stakeholders either internal or external and their interest in the financial information. It also
includes records of various business transaction regarding book entry keeping. Further it includes
final accounts for sole traders, partnership or limited companies with respective of principles,
conventions and standards. Lastly the report ends up with the various transaction relating to the
suspense account in respect of financial accounting of the company.
A) Regulation relating to accountancy in terms of rules, principles and
conventions.
1) Financial accounting and its purposes:
Financial accounting in respect of accounting in relation to discloses the financial
transaction of the company. This financial statement is mainly prepared to avail the use of public
and the can examine the financial position of the company in better perspective (O'Regan, 2015).
Usually company preprepared their financial accounting to examine the statement in respective
of income, cash flows and balance sheet reflecting the purpose for which company is dealing in
other activities externally to expanding their operational activities into large scale. Financial
accounting is mainly prepared under the international accounting standards and the company had
to follow certain accounting norms which is not be avoided or bifurcated from any other activity.
(Brandau and et.al., 2017). Thus, financial accounting is mainly prepared to provide the
information and data which is useful for the outsider to know the stability of the company in
carrying their operational activities for further uses.
The main purpose of financial accounting is that it provide the complete and detailed
information about the company and their financial activity to their external stakeholder, so that

the inventor and lender who invested money in the company are secured, and they can live the
stress free life (Abdel-Maksoud, Cheffi and Ghoudi, 2016). The financial accounting reports are
prepared in the systematic format and their main purpose is to set some goals to the managers,
supervisors and the employees to achieve and maintain the targets to accomplish the goals.
2) Examining the internal and external stakeholders of the organization.
Stakeholder may be organization, individual or group of person who carry forward or
minutely examine the business activities of the company. The two internal stakeholders namely
employees and Owners (Internal and external Stakeholder: Definition and Examples, 2019). The
employees are interested in viewing the financial information of the organization by knowing the
operational activity of the company and their stability in achieving or dealing in other projects.
This reflects their job security and their wages which they received in context of committing
work. In context of Owners, by getting more information about the financial stability of the
company they are in relation of earning more profits to maximize the income and reducing the
expenses in relation for longer term.
The external stakeholders of the organization are suppliers, investors, government and
Society. The suppliers are interested in knowing the information which makes them satisfied that
they contribute to purchase their raw materials from them only (Cameran, Campa and Francis,
2018). That's the reason they are more conscious to know the financial position of the company.
Investors had invested their amount in the company for longer term profit's and provide good
interests in such investment. The reason to analyse the financial reporting is to examine that there
money are invested at the proper place or not. Government examined that the company is
following the proper accounting norms and the laws which they are bounds in relation to paying
taxes. Though the financial reporting it reflects the financial condition of the company and the
stability of employees working in the premises (Madawaki, 2016). Society is the major aspects
of the business as they always demand contribution of business in some social changes which
improves the condition of environment. Thus, by viewing their financial statement, they can
examine the income which they expand in bringing more innovation in society.
CLIENT 1
i.
Journal entries in the books of Alexandra for January 2019 are as follows
Date particulars Debit Credit

1st jan 2019 Storage exp.A/c Dr 450
To bank A/c
2nd jan 2019 Purchase A/c Dr 6080
To S. hood A/c 1450
To D main A/c 2060
To W Tone A/c 960
To R foot A/c 1610
3rd jan 2019 J Wilson A/c Dr 1200
T . Cole A/c dr 1650
F. Syme A/c Dr 2100
J . Allen A/c Dr 1020
P. white A/c Dr F. Lane A/c Dr 2520
F. lane A/c Dr 980
To sales A/c 9470
4th jan 2019 Motor Exp. A/c Dr 470
To cash A/c 470
7th jan 2019 Drawing A/c Dr 1500
To cash A/c 1500
9th jan 2019 T. cole A/c Dr 680
J. Fox A/c Dr 1310
To sales A/c 1990
11th jan 2019 Sales return A/c Dr 680
To J. wilson 270
F.syme 410

16th jan 2019 Cash A/c Dr 7020
To P. Mullen A/c 1400
To F. Lane A/c 3100
To J. Wilson 850
To F. Shyme 1670
19th jan 2019 R. foot A/c Dr 50
To Purchase return A/c 50
22st 2019 Purchase A/c Dr 3740
To L.Mole A/C 1830
To W. Wright 1910
24th jan 2019 S. Hood A/c DR 3600
J. Brown A/c Dr 4600
R. Foot A/c Dr 1400
To Bank A/c 9600
27th jan 2019 Salary A/c Dr 4800
To bank A/c 4800
30th jan 2019 Business rates A/c Dr 1320
To bank A/c 1320