Financial Accounting Principles Report: Journal Entries, Trial Balance

This comprehensive financial accounting report delves into the core principles and regulations governing financial accounting practices. It begins with an introduction to financial accounting, its importance, and the associated regulations, including a breakdown of key financial statements like income statements, balance sheets, and cash flow statements. The report then explores accounting principles like matching, going concern, full disclosure, and cost principles. It further examines accounting conventions such as consistency and materiality, and accounting concepts. The report is then divided into six sections that offer practical applications through client examples. These examples cover the double-entry system, ledger posting, trial balance adjustments, final account preparation, bank reconciliation processes, and the reconciliation of control and suspense accounts. The report provides a detailed guide to understanding and applying fundamental accounting concepts, principles, and procedures with real-world examples to facilitate effective financial management and reporting. It's a valuable resource for students seeking to master financial accounting.

FINANCIAL ACCOUNTING
PRINCIPLES

CONTENTS
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................1
Business Report...............................................................................................................................1
(a): Meaning of financial accounting.....................................................................................1
(b): Regulation associated with financial accounting.............................................................2
(c): Accounting principles and regulations.............................................................................3
(d): Accounting convention and concept of consistency and materiality...............................4
CLIENT 1: Journal Entries..............................................................................................................5
P1 Application of double bookkeeping system......................................................................5
P2 Framing of trial balance applying the use of the balance off rule to complete ledger....14
CLIENT 2......................................................................................................................................15
P3 Make final accounts form given trial balance and adjustment of accruals.....................15
CLIENT 3......................................................................................................................................16
P4 final accounts form range of examples contains sole traders, partnerships or limited
company...............................................................................................................................16
P5 Apply the bank reconciliation process to prepare a number of statements.....................18
CLIENT 4......................................................................................................................................19
P6 Process taken to reconcile control accounts and clear suspense accounts using accounts20
CONCLUSION..............................................................................................................................21
REFERENCES..............................................................................................................................22

INTRODUCTION
Financial accounting is considered as a method, process, procedure subject to analyse the
context in terms of presenting financial information and data in specific manner. There are type
of accounting rules and the principles defined in this context to elaborate the financial
accounting. This report is bifurcated in two parts, first part covers the financial concepts in
business report and second part contains six sections. In first section the double entry system are
illustrated with practical examples. Second section defined the rules related and theories to assist
the ledger posting procedure (Narayanaswamy, 2017).
Third section covers the rules related to trial balance adjustments in terms of depreciation
and prepaid expenses. Section four contains the preparing and forming of final accounts to get
effective management and services in terms of making the statements. Section fifth defines the
concept of bank reconciliation statement and the factors affecting bank reconciliation statement.
Section sixth contains the process to be taken to reconcile control accounts and clear suspense
accounts using account example.
Business Report
(a): Meaning of financial accounting
Financial accounting encounters the important aspect which remain associated with the
accounting standards and the managing the accounting information and the detail in
organisational context. Organisations are adapting the financial accounting rules and principles
in terms of getting the core effectiveness within financial operations and management. There are
some specific guidelines made subject to retaining the financial information and making the
financial plans are defined in this context. Financial accounting principles and the concepts helps
to define the financial position and the financial stability of organisation. Financial accounting
provides a horizontal structure for presenting and keeping the financial records and the
transaction well-structured form. Financial information is provided in various formats as per
their nature and theme. There are some financial statements defined below subject to present the
financial statement (Lundberg and Sundbaum, 2016).
Income statements: there are some transactions happens in respect of revenues and the
expenditure. Income statement provides a path to record the information in organised manner
such as in debit side and credit side. All the revenue related transactions are recorded in credit
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side and all the expenses related transactions are recorded in debit side. It assists the managers
and the accountants whether the organisation is gaining profit or loss.
Balance sheet: Money related association and other partner decide their monetary
articulations for giving adequate credits and putting resources into the organizations
(Cernusca,and Balaciu, 2015). This is by all accounts one of the vital explanations of the
organization which used to give particular data about all detail parts of advantages and obligation
an organization is having with them. By utilizing this announcements, money related position
and security in regard to different organizations positions are considered.
Cash flow statements: This is by all accounts one of the pivotal articulations which will
be utilized to decide inflows and outpourings from different exercises of an association that are
gathered from different working exercises, contributing and financing exercises. This
announcement empowers directors to recognize the general changes of money amid bookkeeping
time frame.
Changes in statement of equity: It records every fundamental change that are done in
capital adjust of an association over a given time frame. It is known as more comparative
proclamations of adjustment of every single vital change in accomplice’s value for a different
citizen’s value for a legislature money related reports (Romolini, Fissi and Gori, 2017).
(b): Regulation associated with financial accounting
Budgetary bookkeeping guidelines is worry with private, non-benefit association those
are setting bodies. Current announcing and practices are having just more association with
general manageability of an association. Be that as it may, UK framework gives an account of
advances towards endeavour to consolidate general needs of manageability into the monetary
general existence of reports. Their part is to set up and make adjustment in GAAP according to
the enthusiasm of open. Controllers used to apply those two viable framework for overseeing and
controlling about administrators report their budgetary results amid a bookkeeping time frame.
There are no any current lawful needs that an organizations used to write about degree to which
their exercises are agreement with fundamental request or supportability advancement. To keep
up all principles and controls, different administrative bodies are made by following IASB and so
forth. The ASB is another vital bookkeeping standards which are utilized by the organization
amid definition of budgetary reports. The money related information clients are wide and
differentiated range according to the monetary bookkeeping. In light of such change the
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information expected to each individual is required for a lot of ways. These standard used to
give bookkeeping control that can help supervisors and bookkeeper in defining monetary records
through utilizing money related information of the organization
(c): Accounting principles and regulations
Cost accounting principles are made in terms of different type of accounting tools
adopted by organisation in terms of managing the cost principles. In each business association, it
depends on different basic tenets and directions that are being received or proposed by utilizing
certain rules those are should have been taken amid definition of fitting explanations. There are
different tenets and ideas that are oversee fitting bookkeeping (Warren and Jones, 2018). It each
industry circulates their money related proclamations to open, it is expected to execute GAAP
standards amid detailing of different explanations. It comprises of real three decides that
essential bookkeeping standards and directions, the point by point tenets and strategies those are
being issued by FASB and their ancestor the bookkeeping standards board. Further, in the event
that organization general stock is traded on an open market and required money related records
be inspected by a gifted bookkeeper. Underneath specified d
 Matching principles: This bookkeeping standards requirement for organizations to make
utilization of gathering premise of information. It can't be measure the future monetary
advantages of everything like notice the bookkeeper charges. This specific standards
require that all costs to be coordinated with add up to profit of the organization
(Henderson and et. al., 2015).
 Going concern principles: This sorts of bookkeeping angles expect that an organization
will keeps on existing for longer time frame so as to accomplish their points and goals
into the assigned time allotment. In the event that bookkeeper trust that, the state of
organization isn't so viable then the bookkeeping books of that specific organizations
bookkeeping books are shut for next coming time.
 Full disclosure principles: there are sure data which is to be made by speculators
through utilizing budgetary explanations that information would be revelation inside
arranged proclamations. It is prerequisites that are connected with openly broker
organizations those are discharging and give free trade of realities that are pertinent to
their proceeding with business tasks. It is connected with fundamental bookkeeping
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perspectives that taken concerning achieving more reasonable outcomes in coming time
frame.
 Cost standards: According to as bookkeeper is concern, they used to consider cost as
those sum which is spent amid a things was initially gotten. Thus, a benefits sum does not
mirror the aggregate sum of wage an organization which will be get on the off chance
that it is offer the advantage at current time frame. For this specific reason, the aggregate
esteem show on money related proclamations those are alluded to be recorded on
verifiable cost premise.
Regulations and rules:
There are sure bookkeeping rules which will be consider for compelling chronicle of
money related exchanges those are done inside a bookkeeping system. Some of them are
specified as follows:
 Real account: According to this standards, charge what comes in and credit all qualities
those are goes out amid the time of business tasks. Such sort of record is connected with
nature of advantages those are utilized by an association.
 Personal account: The bookkeeping decides says that charge the collectors and credit all
add up to suppliers. It is known as one of the powerful record which is being utilized by a
person for that people that are possess prerequisites. Some vital illustrations, capital and
illustrations.
 Nominal account: The guidelines give data about charges all costs and misfortunes and
credit all livelihoods and benefit. This is by all accounts most extreme essential money
related exchanges that are done at the season of each monetary period.
(d): Accounting convention and concept of consistency and materiality
There are conventions are made which are followed from generation and time to time. it
is known as basic parts of bookkeeping that are utilized for the chronicle of a business
exchanges. It is useful in those circumstances which isn't having any sort set rules in
bookkeeping guidelines that are represent amid to particular time duration. There are different
compelling sorts of bookkeeping traditions that are considered in charge of improvement the
development and benefit for an association. Some of them are:
Consistency: Modification must be done in which new strategies it embraced by the
organization. It is required to choose most suitable bookkeeping instruments and methods that
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are made for the alterations on customary premise (May, 2013). There are sure illustrations that
are being consider for look at general quality and monetary position of the organization.
Materiality: This idea is all around feasible that every single material perspective are to
be uncovered by the organization. This would be connected through the connected inspectors in
arranging and assessment the review and in breaking down impact for deciding misquotes on
report of the announcements. This is by all accounts one of the viable bookkeeping traditions
which are consider for settling on impacted the financial choice of clients.
Concepts:
concepts help to sort the essential needs and requirement with in organisation related to
financial factors and elements. In terms of managing the operations and this mainly helps to
define the essential aspects in terms of managing the financial. Some of them are defined as
follows:
 Money measurement: It alludes as cash estimation ideas that used to control business
just to record bookkeeping exchanges in the event that it can be specified in regard to
general capital. On the off chance that items are can't be recorded as bookkeeping
exchanges since they can't have the capacity to expressed in regard to cash.
 Conservatism: In bookkeeping, the tradition of conservatism is related with the
arrangement of envisioning most ideal misfortunes amid the eventual fate of points. This
conservatism idea is essentially related with that ideas in more typical viewpoint for
perceiving costs and obligations that are conceivable in vulnerability in regards to
different outcomes that are accomplish amid the time frame (Mulford and Comiskey,
2011).
CLIENT 1: Journal Entries
P1 Application of double bookkeeping system
In bookkeeping terms twofold passage arrangement of bookkeeping implies that each
business information. It implies that each exchange will be related with no less than two record
impacts. On the off chance that organization used to gets cash from the banks, they general
resource increment add up to risk as net payables is expanded adequately (Henderson, Peirson,
Herbohn and Howieson, 2015). A central viewpoint for basic impact in everyday accounting and
bookkeeping subtle element angles those are connected with money related exchange has inverse
impacts in no less than two different record. Each exchange need to fulfil in following condition:
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Asset= Liabilities + Equity
Date Particular Debit
(Amount)
Credit
(Amount)
01/05/16 Store expenditure A/c............... Dr
To Bank A/c......................CR
(Being payment is made through using cheques)
400
400
02/05/16 Purchase Account ….....................Dr
To Creditor.........................Cr
(Goods purchase on credit)
6080
6080
03/05/16 T. Cole A/c...............................Dr
J. Allen A/c................................Dr
F. lane A/c.................................Dr
J. Wilson A/c.............................Dr
F. Syme A/c................................Dr
P. white A/c................................Dr
To Sales account.............................Cr
(Being goods sold on credit)
1640
910
770
1120
2080
2420
8940
04/05/16 Motor expenses A/c.......................................DR
To cash A/c........................Cr
(Being payment is made through cash)
470
470
07/05/16 Drawings Account.........................................Dr
To cash account.............................................Cr
(As cash goes out from business in related to make
payment for personal use)
1500
1500
09/05/16 J. Fox A/c.....................................Dr
T. Cole A/c...................................Dr
To Sales A/c...................................Cr
(Selling of products on credit)
1310
680
1990
11/05/16 Sales outward A/c.........................Dr 680
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To F. Syme A/c........................Cr
To J. Wilson A/c.......................Cr
(Being Creditor return their merchandise)
410
270
14/05/16 Van A/c.............................Dr
To Able motor Ltd A/c..................Cr
(As products are brought on credit)
28500
28500
16/05/16 Bank A/c.............................Dr
To F. Lane A/c.............................Cr
To P. Mullen A/c.........................Cr
To J. Wilson A/c..........................Cr
To F. Syme A/c.............................Cr
Discount allowed A/c..............Dr
To J. Wilson.............................. Cr
F. Syne.,,................................Cr
F. Lane...................................Cr
P. Mullen.................................Cr
(Being deduction allowed to the creditors)
6670
352
2945
1330
808
1587
44
84
155
70
19/05/16 R. Foot A/c.............................Dr
To Purchase outward
account............................Cr
(Being return goods to R. foot)
50
50
22/05/16 Purchase A/c.................................Dr
To W. Wright.................................Cr
L. Mole......................................Cr
(Goods are brought on credit)
3740
1910
1830
24/05/16 J. Brown A/c.....................................Dr
S. Hood A/c.......................................Dr
R. Foot A/c........................................Dr
To Bank A/c.....................................Cr
4140
3240
1260
8640
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R. Foot A/c...................................Dr
S. Hood A/c..................................Dr
J. Brown A/c.................................Dr
To Discount receive A/c................Cr
(Being certain amount of discount is received and
payment made with 10 %)
140
360
460
960
27/05/16 Salary A/c.....................Dr
To Bank A/c..................Cr
(Being commerce of salaries is successful by the usage
of cash)
4800
4800
30/05/16 Business Rate A/c..........................Dr
To bank A/c...................................Cr
(Being enterprise rates are cashed through cheques)
1320
1320
31/05/16 Able motors A/c......................Dr
To Bank A/c.........................Cr
(Motor expenditure paying through cheque)
20500
20500
Ledger posting
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P2 Framing of trial balance applying the use of the balance off rule to complete ledger
It is by all accounts more compelling articulation of all charge and acknowledge
explanations for any contradiction which would show general blunders those are examine amid
setting of diary sections. It is basic for each association to set up all such budgetary records with
a target of distinguishing the mistakes that may happened while recording exchanges into general
records proclamations. In the event that the standards of twofold passage utilized as a part of
association which is accurately included to record business exchanges in record accounts. It is
considered as a powerful rundown of all record accounts which contains all pivotal data which
should be consider while recording exchanges. After diary passages, preliminary adjust ought to
be set up for a specific period which are think about chronicle of business exchanges (Horngren
and et. al., 2012).
The obligations and credit segment of trail adjust must be equivalent. It happens to be
essential base of planning of money related articulations toward the finish of bookkeeping
timeframe. The tasks of preliminary adjusts are required to first investigate the blunders which
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are made amid recording of monetary exchanges with an intention of looking at charge and
credit side. Bookkeepers and accountants are obligated to plan such money related records
keeping in mind the end goal to discover genuine and reasonable monetary position of
organization.
CLIENT 2
P3 Make final accounts form given trial balance and adjustment of accruals
(b): Financial statements of Peter piper
Particulars Amount (figures in ￡)
Current assets
Trade receivables 106960
Inventory 101640
Cash in bank 2440
Advertisement cost expenses 8470
Total current assets 219510
Vehicle charges 28000
Free Hold Premises 270000
Equipment cost expenses 172500
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Total non-current assets 470500
Total assets 690010
Liabilities and equities:
Current liabilities
Trade payable 76910
Outstanding salary expenses 1220
Bank overdraft 11290
Accumulated depreciation 163950
Total current liabilities 253370
Capital 332120
Add: Gains 147160
Less :- Drawings (42640) 436640
Total equities and liabilities 690010
CLIENT 3
P4 final accounts form range of examples contains sole traders, partnerships or limited company
a) Income statement of Raintree Ltd for the year ended 31 December 2017
Particulars Amount Particulars Amount (Figures in £)
To Stock at the beginning 17000 By sales a/c 107000
To Purchases a/c 32000
To return Inwards 2000
To Gross Profit c/d 74000 By Stock at closing year 18000
125000 125000
To Operating expenses 30000 By Gross profit c/f 74000
To office Expenses 4000
To Depreciation charged 15000
To Allocation costs 19000
To net profit 6000
74000 74000
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(b): Balance sheet of Raintree Ltd for the year ended 31 December 2017
Particulars
Amount (Figures in
£)
ASSETS:
C.A.
Trade receivables 24000
Rent expenses paid in advance 3000
Inventories 18000
Cash at bank -15000
Total current assets 30000
Non-Current Assets:
Land and Building 60000
Machinery and plant 65000
Total non- current assets 125000
T.A 155000
Shareholder's equity and Liabilities:
C.L
Office
Tax 4000
Outstanding operating cost 2000
Tax provision 37000
Trade credit payable 14000
T.L 57000
Shareholder's Equity
Equity premium reserve 20000
Equity stock issues at 1 per share 50000
Net profit 6000
Retained Profit 22000
Total equity 98000
Total equities and liabilities 155000
(c): Different types of accounting concepts
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Consistency: Under this bookkeeping idea all the detail data are should have been
considered. This idea of budgetary articulations recommend that general organization would be
at risk to stay away from different alteration with respect to strategies and standards there are
think about more sensible stage for the adjustment or receiving different controls (McCarthy and
et. al., 2012). This is by all accounts more solid angles expresses that information can't be
composed that will be disregard into the bookkeeping rules for substantial information. In the
event that specific exchange that strikes endeavours to decide conflicting information to be
whole into exchanges to be moved back amid the timeframe. There are different
criticalness parts of bookkeeping standards of consistency keeping in mind the end goal to make
guarantee that general similarity of the budgetary of the organizations with different speculators
and shareholder's.
Prudence concept: A bookkeeping rules that need to record all costs and liabilities yet
the procuring must be acknowledged or guaranteed in right way. The essential parts of utilizing
this bookkeeping viewpoint that would be moderate in detailing the winning other related matter
of the organization. According to this bookkeeping suggests that general budgetary
proclamations that are made by bookkeeper that would not overestimate the procuring, benefit
and different additions of the organization. It is key bookkeeping viewpoint which used to ensure
that advantages and salary are specified appropriately under this idea. The misfortunes and
obligation commitment will be recorded in budgetary explanations of the organization which are
happened amid the timeframe. The arrangement for awful obligations can't be show that account
holders are having reasonable measure of restore that are shown for dissecting danger of the
organization.
P5 Apply the bank reconciliation process to prepare a number of statements
BRS (Bank Reconciliation Statement): Bank compromise articulation basically arranged
to recognize the distinction between the bank book and money book subject. There are some
distinction making factors remain related with activity and administration. It is considered as a
procedure of recording the exchanges which occur amid the month (Renz and Herman, 2016).
Bookkeepers break down the adjust of bank pass book and money account. With the assistance
of bank compromise articulation bookkeepers have the capacity to discover the exchanges which
makes distinction for a specific span and time. This announcement tracks the fiscal exchanges
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with more successful and dynamic way so the distinction making exchanges have the capacity to
merge in more viable way (Weygand, Kimmel and Kieso, 2015).
Every one of those store that are made to the banks yet couldn't be credited by banks amid
the time. For example, this is related with checks those are sent to bank for the goal of
information gathering. Certain measure of store put forth to the bank expressions at certain sum
from those are said as per organizations general records. Decide records in bank proclamations
those are not recorded at each purpose of exchanges.
CLIENT 4
P6 Process taken to reconcile control accounts and clear suspense accounts using accounts
Sales ledger account: this is the primary deals accounts combines every one of the
points of interest which remain related with exchange indebted individuals control accounts.
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Deals control account chiefly considered as a business sum signify accommodated. Normally, a
bookkeeper is considered as in this setting subject to characterize accounts in the money related
records of business (Hyndman and Connolly, 2011). There are some product and control
frameworks are likewise considered in deals control accounts as borrower bookkeeping and
invoicing and programming. Enlist of instalments and deal with the solicitations in a single
place. There is data related all the account holder are characterized in this setting subject to
characterize the equalizations and remarkable per client.
Purchase control account: Purchase record control accounts contains the data identified
with all the applicable data and subtle elements in such a way thus, to the point that lenders have
the capacity to oversee in viable way (Renz and Herman, 2016). There are some product and
projects additionally shaped as far as dealing with the records of leasers. There some further
developed and predefined data remain related with dealing with the working the buy book and
lenders.
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CONCLUSION
This report is set up in regard of money related bookkeeping and cash related articulating.
There is a centrality of trade related bookkeeping delineated out this novel condition.
Disintegrating structures, get-together and treatment of astounding costs cleared up in solid
based decisions and conditions. Bookkeeping procedure and medications are reviewed in regard
of sole dealer association together, affiliations and compelled affiliations. Centrality of twofold
space accounting structure as charge and credit. Outlines and buy exchanges when all is said in
done records, preliminary modify and the direct of progress off used to finish the record posting.
Enormity of bank exchange off presentation and techniques are cleared up in this report.
Centrality of strain records and oblige structures in regard of record control accounts are
portrayed in each segment.
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