Financial Accounting Report: IFRS and Financial Statements

This report delves into the core principles of financial accounting, emphasizing the preparation of reliable financial statements. It begins with an overview of the double-entry bookkeeping system, detailing journal entries, ledger accounts, and trial balances. The report then explains the creation of profit and loss accounts and balance sheets. Task 1 focuses on double-entry bookkeeping, providing examples. Task 2 addresses bank reconciliation statements and related concepts, including direct debits, standing orders, bank charges, and dishonored checks, along with rectified journal entries and a suspense account. The report concludes by highlighting the importance of financial accounting for informed decision-making and organizational success, referencing relevant accounting standards and practices. It emphasizes the significance of financial statements in evaluating a company's performance and position.

Financial accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Question 1....................................................................................................................................1
......................................................................................................................................................2
Question 2....................................................................................................................................7
TASK 2............................................................................................................................................9
Question 1....................................................................................................................................9
Question 2....................................................................................................................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
In business world, the term financial accounting is related to the preparation and
development of useful, authentic and reliable annual statements at the end of financial year so
that actual performance and position of a company can be determined by stakeholder (Ball,
2013). This basically support to analyse, summarise, report each important business dealing of a
company within a financial statements. The report discuss the use of double entry book keeping
system preparation of trial balance, final accounts for limited companies sole traders and
partnership as per IFRS standard. Apart this report also includes general formulation of financial
record that are used by different user and bank reconciliation statements, control accounts and
clearing suspense accounts. In addition, reconcile control accounts and clear suspense accounts
are also discussed in this report.
TASK 1
Question 1
Double Entry Book keeping system: In Accounting, this important fundamental
concept defines that each and every reliable financial dealing of business have equal and
opposite impact in at least two different accounts. That simply means each transaction are
recorded in term of debits and credits this is done because one debit side of account offsets the
credit side and there amount must be equal.
1. Journal entries
In business term, journal entries is the process of recording important business
transaction in the final statements of an organisation. The main logic behind these entries is to
record every transaction in two places that is known as double entry bookkeeping system (Arouri
and et.al, 2012).
1

2. The Ledger accounts
2

These types of account are basically prepared to record, sort and store and summarized
useful information of a business transaction. It is mainly consider as a principle book of accounts
that further provide information to prepare useful final accounts.
Cash A/c
Purchase Account
3

Bank A/c
4

Computer Equipment A/c
5

3.The trial balance
In accounting, a trial balance is a list of already prepared ledger accounts that help to
check the accurate and faithful in business transaction. The main purpose of preparing a trail
balance is to determine any type of misrepresentation's or error in the accounting reports. A
balanced trail balance means debit side are equal to credit and in case if there is any deficit a
suspense account is made to balance the actual figures (Bushman and Williams, 2012).
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Trial balance
Capital - 65000
Cash/bank 71675 -
Sales - 26000
Debtor 12000 -
Creditor - 14000
Purchase a/c 18000 -
Computer 3000 -
Drawing 225 -
Petty cash 70 -
Stationary 30 -
Total 105000 105000
Question 2
Profit and loss a/c: It is an important financial statements that summarizes the overall
revenues, expenses and total cost that are being incurred and received by a firm within a
specified time frame. The annual income statements shows the actual ability and strength of a
firm in respect to produce profit by raising revenues and cutting expenses (Martin and
Roychowdhury, 2015).
Profit & Loss a/c of Carol Andrew
For the year ending 31 December 2017
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8

Balance sheet: In financial accounting, a statements of that shows the total of assets,
liabilities and overall capital of a firm or large organisation at a particular period of time it also
detail the balance of income and expenses (Hoopes, 2013).
Balance Sheet of Carlo Andrew
For the year ending 31 December 2017
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TASK 2
Question 1
Revised cash Book (as per bank balance)
Date Particulars
Dr.
balance Date Particulars
Cr.
Balance
Balance as per cash book 1760 Insurance paid 170
Cheque not yet presented 270 Monthly bill 56
Transfer from mr patel 1070 Cheque from arif 186
Drawings 105 bank charges 25
Dividend received 325
By balance as per pass
book 3093
3530 3530
Question 2
Direct Debit Standing Orders Bank Charges Dishonour Cheque
It is strength of client
to supply any rights to
consumer by bank. It
is mainly used by
customer on time to
time.
It is basic facilities
which can be
neglected by customer
on the basis of their
demand.
It is related to different
charges which is
charged by bank on
the provided facility.
In the case of when
customer have not
sufficient amount and
any mistake find out in
cheque so it is
dishonoured by bank.
A) Rectified Journal entries:
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