Financial Accounting Assignment: Recording and Reporting Transactions

This financial accounting assignment solution provides a comprehensive overview of recording and reporting business transactions. The solution begins with a trial balance, followed by detailed journal entries and ledger accounts. It then progresses to the preparation of financial statements, including the balance sheet and income statement, and includes an analysis of the differences between these statements. Furthermore, the solution explores the application of ratios for assessing financial performance and position. The solution also provides an overview of bank reconciliation and suspense accounts, explaining their role in identifying and correcting errors. The document covers the application of double entry system for recording transactions and the assessment of the transactions for the purpose of showing progressions in the trial balance. Finally, it presents the trial balance figures for showing the respective financial statements.

Financial Accounting

INTRODUCTION...........................................................................................................................2
TASK 1............................................................................................................................................2
Task 1.1........................................................................................................................................2
Task 1.2........................................................................................................................................3
Task 1.3......................................................................................................................................15
TASK 2..........................................................................................................................................16
TASK 2.1...................................................................................................................................16
TASK 2.2...................................................................................................................................19
TASK 2.3...................................................................................................................................20
TASK 2.4...................................................................................................................................22
TASK 3..........................................................................................................................................23
TASK 3.1...................................................................................................................................23
TASK 3.2...................................................................................................................................24
TASK 3.3...................................................................................................................................25
TASK 3.4...................................................................................................................................25
TASK 4..........................................................................................................................................27
TASK 4.1...................................................................................................................................27
TASK 4.2...................................................................................................................................28
TASK 4.3...................................................................................................................................28
TASK 4.4...................................................................................................................................30
CONCLUSION..............................................................................................................................32
REFERENCES..............................................................................................................................33

INTRODUCTION
Financial accounting refers to the specialized branch of an accounting which keeps track
of an entity’s financial transaction. By using standardized guidelines, transactions are been
summarized, recorded and is presented in the financial statement like balance sheet and income
statement. In other words it is the practice of framing the final reports which the company uses
for showing their respective financial performance and the position to the users outside an
enterprise that includes creditors, customers, suppliers and investors. The present report is based
on preparation of the final accounts with recording of the business transactions and it’s posting to
the ledger accounts. Furthermore, ratios are computed which helps in assessing the financial
performance of the company in an effective and efficient manner. Moreover, bank reconciliation
and suspense accounts would be presented that would help in analyzing any type of errors if
present.
TASK 1
Task 1.1
Trial Balance of Catherine Horton as on 31st March 2020.
Trial Balance at 31/3/2020
Account Debit Credit
Premises 340000
Van 51250
Fixtures 8100
Inventory 63900
P Mullen 1400
F Lane 3100
Cash at bank 62400
Cash in Hand 5600
S. Hood 2150

J. Brown 4600
Capital Account 529000
Total 535750 535750
Task 1.2
Application of double entry system for recording the transactions
Journal Entries
Date Particulars Debit Credit
01/04/20 Storage Expense 400
To Bank 400
02/04/20 Purchases 5000
To S. Hood 1400
To D. Main 2000
To R. Foot 1600
03/04/20 T. Cole 1650
F. Syme 2000
J. Allen 900
F. Lane 750
To Sales 5300
04/04/20 Motor Expenses 470

To Cash 470
07/04/20 Drawings 1500
To Cash 1500
09/04/20 T. Cole 650
J. Allen 1300
To Sales 1950
14/04/20 Van 28500
To Abel Motors 28500
16/04/20 Bank Ac 6500
To P. Mullen 1400
To F. Lane 3100
To F. Syme 2000
22/04/20 Purchases 1800
To D. Main 1800
24/04/20 S. Hood 2150
J. Brown 4600
R. Foot 1400
To Bank 8150

27/04/20 Salaries 4800
To Bank 4800
30/04/20 Business Rates 1320
To Bank 1320
31/4/20 Abel Motors 28500
To Bank 28500
Total 94190 94190
Ledger Balances
Bank a/c
Date Particulars DR(£) Date Particulars CR(£)
01/04/20 To bal b/d 62400 01/04/20 Storage 400
16/04/20 P. Mullen 1400 24/04/20 S. Hood 2150
16/04/20 F. Lane 3100 24/04/20 J. Brown 4600
16/04/20 F. Syme 2000 24/04/20 R. Foot 1400
27/04/20 Salaries 4800
30/04/20 Business Rates 1320
30/04/20 Abel Motors 28500

30/04/20 By Bal c/d 25730
68900 68900
Cash a/c
Date Particulars DR(£) Date Particulars CR(£)
01/04/20 To bal b/d 5600 04/04/20 Motor Expenses 470
07/04/20 Drawings 1500
30/04/20 By Bal c/d 3630
5600 5600
Van A/c
Date Particulars DR(£) Date Particulars CR(£)
01/04/20 To bal b/d 51250
14/04/20 To Abel Motors 28500
30/04/20 By Bal c/d 79750
79750 79750
Fixtures
Date Particulars DR(£) Date Particulars CR(£)
01/04/20 To bal b/d 8100

30/04/20 By Bal c/d 8100
8100 8100
Capital a/c
Date Particulars DR(£) Date Particulars CR(£)
01/04/20 To bal b/d 529000
30/04/20 By Bal c/d 529000
529000 529000
Purchase a/c
Date Particulars DR(£) Date Particulars CR(£)
02/04/20 To S. Hood 1400
To D Main 2000
To R. Foot 1600
To D. Main 1800
30/04/20 By Bal c/d 6800
6800 6800
P. Mullen
Date Particulars DR(£) Date Particulars CR(£)

01/04/20 To bal b/d 1400 16/04/20 To bank 1400
30/04/20 By Bal c/d 0
1400 1400
Sales a/c
Date Particulars DR(£) Date Particulars CR(£)
03/04/20 T. Cole 1650
03/04/20 F. Syme 2000
03/04/20 J. Allen 900
03/04/20 F. Lane 750
09/04/20 T. Cole 650
30/04/20 To bal c/d 7250 09/04/20 J. Allen 1300
7250 7250
F. Lane
Date Particulars DR(£) Date Particulars CR(£)
01/04/20 To bal b/d 3100 16/04/20 Bank 3100
30/04/20 By Bal c/d 0

3100 3100
S. Hood
Date Particulars DR(£) Date Particulars CR(£)
24/04/20 To bank 2150 01/04/20 Bal b/d 2150
02/04/20 Purchases 1400
30/04/20 To bal c/d 1400
3550 3550
J. Brown
Date Particulars DR(£) Date Particulars CR(£)
24/04/20 To bank 4600 01/04/20 Bal b/d 4600
4600 4600
D. Main
Date Particulars DR(£) Date Particulars CR(£)
02/04/20 To Purchases 2000
30/04/20 By Bal c/d 2000
2000 2000

R. Foot
Date Particulars DR(£) Date Particulars CR(£)
24/04/20 To Bank 1400 02/04/20 Purchases 1600
30/04/20 To Bal c/d 200
1600 1600
Storage
Date Particulars DR(£) Date Particulars CR(£)
01/04/20 To bank 400
30/04/20 By Bal c/d 400
400 400
Salaries
Date Particulars DR(£) Date Particulars CR(£)
27/04/20 To bank 4800
30/04/20 By Bal c/d 4800
4800 4800
Motor Expenses
Date Particulars DR(£) Date Particulars CR(£)

04/04/20 To Cash 470
30/04/20 By Bal c/d 470
470 470
Business Rates
Date Particulars DR(£) Date Particulars CR(£)
30/04/20 To Bank 1320
30/04/20 By Bal c/d 1320
1320 1320
T, Cole
Date Particulars DR(£) Date Particulars CR(£)
03/04/20 To Sales 1650
09/04/20 To Sales 650
30/04/20 By Bal c/d 2300
2300 2300
J. Allen
Date Particulars DR(£) Date Particulars CR(£)
03/04/20 To Sales 900