Financial Accounting Report: Client Portfolio Analysis

This report delves into the core principles of financial accounting, offering a comprehensive analysis of various accounting concepts and their practical applications. The report begins with an introduction to financial accounting, emphasizing its importance in business decision-making, and proceeds to explain generally accepted accounting principles (GAAP) and International Financial Reporting Standards (IFRS). The report then presents a detailed analysis of several client portfolios, including the preparation of journal entries, ledger accounts, trial balances, income statements, and balance sheets. It also explores key accounting concepts such as prudence and consistency, along with depreciation methods. Furthermore, the report covers bank reconciliation statements, control accounts, and suspense accounts, providing a well-rounded understanding of financial accounting procedures. The report also provides details for each client's financial position and performance.

FINANCIAL ACCOUNTING PRINCIPLES

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
(A)Report preparation for line managers.....................................................................................1
B. Portfolio to carter the various clients and resolving their financial needs..............................4
CLIENT 1........................................................................................................................................4
1 Analysing the journal entries for Alex study............................................................................4
2 Presenting the double entry recording with the help of various ledger accounts.....................6
3. Analysing the arithmetical accuracy of double entry system with the help of trail balance. 16
CLIENT 2......................................................................................................................................17
A income statement for the client Peter Piper as on 31st December 2016.................................17
B Analysing the financial position of Peter Piper as on 31st December 2016...........................18
CLIENT 3......................................................................................................................................20
A. Determining the profit and loss statement for Raintree Ltd as per 30th September 2016.....20
B. Determining the financial position of Raintree Ltd as on 30th September 2016...................20
C. Explaining the accounting concepts for Prudence and Consistency.....................................21
(D) Depreciation formulation and two approaches of charging depreciation...........................22
CLIENT 4......................................................................................................................................23
(1)Bank reconcilition statement and its purpose.......................................................................23
(2)Analysis of transactions of Kendal Ltd.................................................................................23
(3) Analysis of BRS on December 2016...................................................................................24
CLIENT 5......................................................................................................................................25
A. Control accounts and their balancing....................................................................................25
B. Control accounts and their concepts.....................................................................................25
CLIENT 6......................................................................................................................................26
A. Suspense account and its main characterisitcs......................................................................26

B. Trial balance.........................................................................................................................27
C. Journal entries.......................................................................................................................27
D. Comparing the Suspense account and Clearing account......................................................27
CONCLUSION..............................................................................................................................28
REFERENCES..............................................................................................................................29

INTRODUCTION
Accounting is the one of the important branch of commerce that have very high
importance for the business firms. There are multiple sort of accounts that are prepared by the
firm like income statement, balance sheet and cash flow statement as well as ledger and trial
balance account. In the business proper recording of all these transactions need to be keep so as
to ensure that financial statements will be prepared more accurately. In the current research
study, for different clients trial balance are prepared. Along with this, income statement is also
prepared. Detail discussion is carried out on bank reconcilition method and its significence is
discussed in detail. At end of the report, conclusion section is prepared. In this way, entire
research study is done.
(A)Report preparation for line managers
To: Line manager
Subject: Accounting rules and principles for the firms
Sir/Mam
Financial accounting description
Financial accounting is the segment of accounting under which varied sort of statements are
prepared like income statement, balance sheet and cash flow statement. Business to business
there is importance of different sort of statements for the firms. For example sole trader always
wish to know about their businesss profitability and due to this reason they does not give much
importance to the balance sheet. On other hand, there are companies who make use of all these
statements (Agoglia, Doupnik and Tsakumis, 2011). Hence, firm to firm significence of these
statements get changed. Apart from financial statements, common size and comprative
statements are also prepared by the business firms. Company can prepare these statements and
can identify percentage change that happened in sales and expenses in the business. By doing
so areas where company is performing well and give poor performance can be identified.
Thus, there is due importance of financial accounting for the business firms because by using
same firm performance can be measured in number of ways and steps can be taken to improve
company performance. It can be said that financial accounting have significent importance for
the firms.
Regulations for financial accounting GAAP: GAPP stands for generally accepted accounting principles and under this
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varied accounting standards are given that need to be followed to perform calculations
in books of acounts. In other words, it can be said that in GAAP already rules that
need to be followed to perform calculations are given and same must be followed to
prepared accounts. Company need to ensure that accountants are following all relevant
rules and regulations tightly in their day to day practice so that accounts can be
prepared accurately.
 IFRS: IFRS stands for international financial reporting standards and same need to be
followed while preparing income statement, balance sheet and cash flow statement.
Means that in IFRS specific format in which these statements need to be prepared is
determined (Altamuro and Beatty, 2010). Compliance with IFRS ensured that
sharehodlers and other stakeholders will receive true and fair information about the
company performance. Thus, there is significent importance of IFRS for the business
firms because it help them in satisfying needs of stakeholders to some extent.
Accounting rules, procedure and principles Cost principle: This principle state that all items must be recorded at cost at which they
are purchased. Means that whatever is there market price at time of recording of
transactions does not matter. Price at which asset was purchased or transaction
happened will be taken in to account. Time period principle: Time period principle state that transactions that are related to
the current year period must be recorded in present year books of accounts. Means that
transaction that happened in present year can not be carry forward for next year
duration. This is because all expenses are made in present year and their benefits are
also received in current year. Due to this reason current year expenses can not be carry
forward to next year time period. Monetary unit principle: It is the principle which state that only those transactions
must be recorded in the books of accounts that can be measured in money. Means that
those transactions in which exchange is made but money is not received till the time
can not be recorded in the books of accounts (Armstrong, Guay and Weber, 2010). Full disclosure principle: It is the principle which state that major transactions must be
explained in detail in the company books of accounts. For example one company
aquire other firm then in that case all information related to transaction must be
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presented in the annual report.
 Going concern concept: Going concern concept is the one of the important concept
which state that business firm will always remain in existence and its ownership may
changed. Hence, all transactions are recorded on name of firm not customers.
Consistency and material disclosure concept
 Consistency: This principle state that business related transactions must be only
recorded in the company accounts. Personal expenditures can not be recorded in
financial statement of the company.
 Material disclosure: All those information that are related to the company must be
considered which preparing financial statements and all additional information must be
presented in the company accounts. It can be said that there is huge importance of these
qualitative characteristics for the business firms.
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B. Portfolio to carter the various clients and resolving their financial needs.
CLIENT 1
1 Analysing the journal entries for Alex study
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2 Presenting the double entry recording with the help of various ledger accounts
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