Financial Accounting Report: Case Studies and Financial Analysis

This report provides a comprehensive overview of financial accounting, encompassing various aspects such as financial accounting terms, regulations, accounting rules and principles, and conventions related to material disclosure and consistency. It delves into the preparation of financial statements for different types of businesses, including detailed case studies of Alex Study, Peter Piper, Raintree Limited, Kendal Limited, and Henderson. The report covers the preparation of profit and loss accounts, balance sheets, and trial balances, along with an explanation of double-entry recording and the purpose and methods of depreciation. It also explores the concept of suspense accounts and the preparation of bank statements. The report references GAAP and FASB, providing a solid foundation for understanding financial reporting and analysis. This report is a great resource for students looking to understand financial statements and related concepts.

Financial Reporting

Table of Contents
INTRODUCTION ..........................................................................................................................3
A) Explain the different terms of financial accounting...................................................................3
1.Financial accounting ...............................................................................................................3
2.Financial accounting regulations..............................................................................................3
3.Accounting rules and principles...............................................................................................4
4. Convention and concepts regards to material disclosure and consistency..............................5
B) Preparation of accounting for the various type of business........................................................5
Client 1 Alex Study.....................................................................................................................5
...................................................................................................................................................17
Client 2 (Case of Peter piper case)............................................................................................19
Client 3 ( Raintree limited) ......................................................................................................22
Client 4 (Kendal limited and bank statement case study) ........................................................25
Client 5 ( Henderson) ...............................................................................................................26
Client 6 ( Suspense account concept) .......................................................................................28
REFERENCES..............................................................................................................................30

INTRODUCTION
Financial accounting is most vital tool and techniques that are adopted by the company to
make financial decision regards to firm. It also helps them to make comparison of financial
position through the previous year net profit with the current sales profits. The financial
statement is prepared by the most of the accountants as per the accounting principles and
guidelines is (GAAP) Generally Accepted Accounting principles (Abdul and et al.,2016). The
present assignment there is a preparation of financial statements for the Peter Piper and Raintree
limited for the ending of year 2016. Thereafter, there is also a preparation of bank statement for
the Kendal Limited has been also discussed.
A) Explain the different terms of financial accounting
1.Financial accounting
It is the procedure of preparation of financial statement of a Company for a particular
time period that shows their financial performance. The statement that are mainly involves in it
are profit-loss accountant, Balance sheet and cash flow statement. The main aim of preparing
financial accounts is to deliver information about the firm's financial position to the external
parties. These are creditors, investors, shareholders, suppliers, government and customers they
access financial data of a company for some purpose. In other words the financial accounting is
the process of records, classified and summarised the business transaction in terms of monetary.
They are mainly used for the purpose of tracking the financial transaction that shows the true
view of financial position of a company. It is a composition of several reports and tools which
shows the accurate economic position and also produce various ideas to deliver the better quality
of services.
2.Financial accounting regulations
There are various financial tools that are adopted to prepared the financial statement of a
company for the purpose of identification of their financial position. There are various regulatory
body that shows the provisions and guidelines of accounting principles. These are described as
follows:-
 Accounting Standard board:- The main aim of accounting standard board is that to
prepare the financial statement of a company as the accounting standard (Aizenman,
Chinn and Ito, 2016). There are various provisions and guidelines which are mainly
provided to record the financial statements accurately and fairly. Thus, according to this,

various application and tools are applied to prepared the financial statement as per the
accounting standards and guidelines.
 International financial reporting council:- It is that type of regulatory body of
accounting of UK which ensure the corporate governance quality. It is mainly provides
the oversight, corporate reporting and maintain all the accounting standards etc
(Anderson,2016). It is constitutes of standard committee, conduct committee and
Executives committee etc. Thus, financial statement is prepared as per the various
regulation of IFRC and it applied disciplinary activities that shows company's income
and expenditure.
3.Accounting rules and principles
There are several accounting rules and principles of a company that are mainly provided
through the GAAP and FASB that must be followed by the Company at the time of preparation
of financial statements. It has been described as follows:-
 Cost principle: It is that type of principle that are defines as per the accounting
viewpoint it is that type of cost when the company incurred at the time of purchasing an
inventory (Barron,Chung and Yong, 2016). Thus, it will be shown in the financial
statement of a company as a cost of product.
 Going concern principles: It is that type of principle of an accounting that make
assumption that the Company is continuously operating in the future foreseeable. It is that
type of principles that are applicable for the banking institution, those who supply credit
and company that traded publicly.
 Conservatism: It is that type of accounting principle that guide the company to record
the events that are uncertain and make estimation (Barth,2015). Thus, several times it
reduces the firm's profits through record of uncertain expenses and not record the
estimated gains.
 Full disclosure principles: It is that type of principle that are needed for a business to
deliver the essential information. It helps the people to read out the financial data that
assist them make decisions that are informed regard to firm (Bazley and et al., 2013).
Thus, the information is to be disclosed in documents notes to the financial statement and
under the fiscal statement of an organisation.

4. Convention and concepts regards to material disclosure and consistency
 Convention of disclosure: It is that disclosure all the necessary data that is one of the
vital accounting convention. It is prepared accounts statement in that way in which there
is an all material information will be disclosed clearly (Beatty and Liao, 2014). Thus, it
will be disclosures under the regulatory body of financial accounting in the board
directors meeting.
 Convention of consistency: It is that type of principle in that there is same accounting
principle administration that are used for the purpose of preparation of financial
statements for the several time period.
B) Preparation of accounting for the various type of business
Client 1 Alex Study
1. The book of prime entry: Most of the firm prepare their prime entry of book that mainly
involves variety of record that representing various type of business. The financial
information are to be recorded at the general level that involves sales return book, bank
book, day book and petty cash book. Thus, according to this financial statements of a
business entity is prepared that are profit-loss account statement, balance sheet and cash
flow statement. Therefore, the books of prime entry that shows for a specific firm through
preparation of each individual accountant.
2. Complete double entry recording: The double system is used by the accountant to
prepare the journals and ledger entry. Thus, each financial transaction are recorded in the
financial statement on both side debit and credit. Thereafter, it will be directly recorded
into the ledger of both sides. There is a needed to record financial transaction on both
credit and debit side equally at the prime level (Evans, 2015). In the financial terms as per
the accounting standards the credit amount can be expressed as' to' and the amount on
debit side it is expressed as 'by'. There are various types of accounting statement prepared
that are purchase journals, sales journal, sales return journals and purchase return journal
etc.