Comprehensive Financial Accounting Report: Concepts and Calculations

This report delves into the core principles of financial accounting, beginning with an introduction to the accounting process and its importance in evaluating a company's financial health. It explores different types of business transactions within single and double-entry bookkeeping systems, elucidating the roles of sales, purchases, and receipts. The report also covers the creation of trial balances and their significance in accounting. It then distinguishes between financial statements and financial reports, detailing the components of income statements, balance sheets, and cash flow statements. The report includes calculations and examples to illustrate key concepts. It further examines accounting principles, such as full disclosure, materiality, consistency, monetary unit, and going concern. The report extends to scenarios involving bank reconciliations, control accounts, and suspense accounts, complete with journal entries and updated cash books, providing a holistic view of financial accounting practices.

Financial Accounting

Contents
INTRODUCTION...........................................................................................................................................3
QUESTION 1.................................................................................................................................................3
Different types of business transaction...................................................................................................3
QUESTION 2.................................................................................................................................................5
Calculation...............................................................................................................................................5
QUESTION 3...............................................................................................................................................10
Different between financial statement and financial report.................................................................10
QUESTION 4...............................................................................................................................................12
Principles of accounting.........................................................................................................................12
QUESTION 5...............................................................................................................................................13
Calculation.............................................................................................................................................13
QUESTION 6...............................................................................................................................................16
Profit and Loss Account.........................................................................................................................16
QUESTION 7...............................................................................................................................................17
Cash flow statement..............................................................................................................................17
SCENARIO 2...............................................................................................................................................19
QUESTION 1...............................................................................................................................................19
Bank Reconciliation...............................................................................................................................19
QUESTION 2...............................................................................................................................................20
Control accounts....................................................................................................................................20
QUESTION 3...............................................................................................................................................21
Suspense Account..................................................................................................................................21
QUESTION 4...............................................................................................................................................21
(a) Required to prepare updated cash book and bank reconciliation statement..................................21
QUESTION 5...............................................................................................................................................23
Journal entries.......................................................................................................................................23
CONCLUSION.............................................................................................................................................25
REFERENCES..............................................................................................................................................26

INTRODUCTION
Accounting is a process of identifying, recording, assessing, categorizing, verifying,
assessing, understanding, and distributing financial data in a systematic manner. It shows the
profit or loss for a certain time as well as the worth of the company's assets, obligations, and
stock. Accounting is the activity of recording and reporting a company's financial activities.
Referencing, analyzing, and supervising those transactions to regulatory bodies, regulatory
authorities, and customs officials are all part of the tax investigation process. (Kustono and
Nanggala, 2020). This paper covers a variety of subjects, including how to record company
transactions using a single or double entry bookkeeping system, how to create balance sheet
utilizing proper accounting standards, and how to execute bank reconciliation. It also discusses
the control and suspense account, as well as why it is necessary for writing.
QUESTION 1
Different types of business transaction
In single and double entry accounting, there are numerous sorts of business transactions. It
is divided into four primary categories, as follows:
Sales: This is an activity whereby the organization trade internationally towards another
corporation but instead gives the revenue to the customers or obtains stocks on margin. Such
sellers and buyers activities are recorded in accounting record, which become typically examined
for marketing purpose, producing in journals and many other archives. In this activity, customers
will be debited, while sales entities will be credited.
Purchase: Whereas a corporation or anyone purchase things, this operation is regarded as a sale.
If the framework makes item, the payments will be recorded in the accounting period to the
purchase account, and indeed the individual or creditors to which the payment was delivered will
be credited. This type of conduct is typically carried either in goods sold or services. Every
activity was also reflected in the financial statement for the intention of accounting.
Receipts: Some costs apply to certain other companies and individuals that whenever a
government taxes for delivering the services to yet another company. Additionally, those sales

are recorded in publications, with retailers having debited to business receivables as debit, cash,
or credit payments (Roychowdhury, Shroff and Verdi, 2019).
Define single entry book keeping:
It is an accounting system which is used to record all of a company's commercial
transactions. Each payment system has had its own entry, with the majority of the entries
registering either incoming or outgoing cash. Transactions are recorded in the "cash book,"
which is a spreadsheet with sections for time, description, or if the operation represents an
expense or profit.
Define double entry book keeping:
It is based on the fact how each operation appears to have two sides and, as a result, will
affect two balance sheets. A debit input into one bank and a high credit into some other account
are included in each action. It guarantees that each activity is recorded in different sides: one is
debit because it gathers worth, and another is rewarded because it has significance.
Explain trial balance and its importance:
Different entries in many categories will make up a ledger. Trial Balance is the process of
combining all ledger balances into a single worksheet as of a specific date. At the conclusion of
each monthly, the group examines its activities and divides them into several categories. They
are currently creating a sheet and categorizing the categories as successful or ineffective.
Following the compilation of diary entries and publishing to accounting records, an accounting
equation is the third phase in the production of books of accounts (Aini, Anoesyirwan and Ana,
2020). The various ledger accounts are weighed and the ending amounts are computed once the
required documents are published to the accounting records. Those ending amounts (together
with their corresponding debits and credits) are transferred over the financial statement to see if
the debit card transactions and credits totals are identical.

QUESTION 2
Calculation

Ledger accounts

Trial Balance

QUESTION 3
Different between financial statement and financial report
Financial statement: The objective of financial reporting is to provide an understanding
of a company's financial condition, future revenues, and process efficiency. This system helps
consumers to make decisions about capital allocation. The income statement, balance sheet, and
profit and loss account are the three most well-known income reports.
• The net income that declares the shareholder's earnings and spending in order to earn profit and
indicates the quantity of earnings as well as the nature of aspect of financial. It can be used to
investigate the performance (Shakespeare, 2020).
• The balance sheet's purpose is to reveal the union's current financial situation as of the
balancing file's time. It was used to forecast things like strain, borrowing, and finance.

• The structure of cash receipts and disbursements is considered using the cash flow statement.
Although bank deposits do not always match the revenue and expenditures shown in the
financial statements, it is a very useful financial report.
Financial reports can also be used to make a variety of decisions, including financial
transactions, asset allocation, tax considerations, and client judgments.
Financial Reports: Financial reports collect and disseminate essential financial facts to the
general public. Monetary file is processed available to the general public in order to pique their
invested interest. Yearly profits are published in news reports, via video call, or on the
company's site.
Regulatory organizations including the Securities & Exchange Board get regular financial
statements. It is important that the yearly statistics are accurate and up to date. The information
provided above enables the firm to make well-informed business choices and ensuring
accountability and a good image. A strong financial accounting system is simple for using,
trustworthy, and easy to understand (Al-Dmour, 2019).
In the framework of Financial Company, there are also many users of financial reporting, which
are mentioned below:
 Owner: Investors and stockholders seek financial expertise to help them decide whether
to keep, buy, or transfer more of their properties.
 Management: Owners and managers might be involved in management. In smaller firms,
meanwhile, process is usually comprised of paid experts who have been tasked with
directing the company or an industry sector. They perform the function of open software
controllers.
 Staff members: These individuals are concerned about the company's long-term viability
and existence. They're all about whether or not firm can pay workers' wages and qualify
for benefits. They may also be interested in the financial condition and outcomes in order
to assess corporate development and employment progression prospects.