Finance Accounting Assignment Help

Introduction


Financial accounting helps to calculate the profit or loss of an organization and therefore, this tool is to be considered as necessary for the business firms in modern era. As stated by Weil et al. (2013), the financial accounting considers journals, ledgers and trial balance as the primary accounting techniques to ascertain the profit or loss through final accounts. This study would focus on the journal entry, ledger preparation, and preparation of final accounts by considering the different cases. Moreover, the researcher shall analyze the bank reconciliations and rectification of errors in accounting in the final part of the study.

Case 1

Journal entries


In the books of Norris

Journal entries

Particulars

Dr

Cr

Amount (GBP)

Amount (GBP)

Cash A/c Dr

60

To Sales

60

Insurance premium A/c Dr.

400

To Bank

400

Customer A/c Dr.

250

To Sales

250

Travelling expenses A/c Dr.

50

To Bank

50

Purchase A/c Dr.

170

To Suppliers'

170

Drawings A/c Dr.

57

To Bank

57

Purchase A/c Dr.

40

To Cash

40

Office equipment A/c Dr.

800

To Bank

800


finance accounting assignment help

Ledger accounts

Ledgers

Sales account

Dr

Cr

Particulars

Amount (GBP)

Particulars

Amount (GBP)

By cash A/c

60

By Customers' A/c

250

To balance c/d

310

310

310

Insurance premium account

Dr

Cr

Particulars

Amount (GBP)

Particulars

Amount (GBP)

To bank A/c

400

By balance c/d

400

400

400

Bank account

Dr

Cr

Particulars

Amount (GBP)

Particulars

Amount (GBP)

By insurance premium

400

By traveling expenses

50

By drawings A/c

57

To balance c/d

1307

By office equipment A/c

800

1307

1307

Travelling account

Dr

Cr

Particulars

Amount (GBP)

Particulars

Amount (GBP)

To bank A/c

50

By balance c/d

50

50

50

Purchase account

Dr

Cr

Particulars

Amount (GBP)

Particulars

Amount (GBP)

To Suppliers' A/c

170

To cash A/c

40

By balance c/d

210

210

210

Drawings account

Dr

Cr

Particulars

Amount (GBP)

Particulars

Amount (GBP)

To bank A/c

57

By balance c/d

57

57

57

Cash account

Dr

Cr

Particulars

Amount (GBP)

Particulars

Amount (GBP)

To sales A/c

60

By purchase A/c

40

By balance c/d

20

60

60

Office equipment account

Dr

Cr

Particulars

Amount (GBP)

Particulars

Amount (GBP)

To bank A/c

800

By balance c/d

800

800

800

Customers' account

Dr

Cr

Particulars

Amount (GBP)

Particulars

Amount (GBP)

To sales

250

By balance c/d

250

250

250

Suppliers' account

Dr

Cr

Particulars

Amount (GBP)

Particulars

Amount (GBP)

By purchase A/c

170

To balance c/d

170

170

170


Trial balance

Trial balance as on …

Particulars

Amount (GBP)

Amount (GBP)

Debit

Credit

Sales account

310

Insurance premium account

400

Bank account (Overdraft)

1307

Travelling account

50

Purchase account

210

Drawings account

57

Cash account

20

Office equipment account

800

Customers' account

250

Suppliers' account

170

Suspense

1787

1787

Case 2

a. Ledger


Ledgers

Capital account

Dr

Cr

Particulars

Amount (GBP)

Particulars

Amount (GBP)

By bank

10000

To baalance c/d

10000

10000

10000

Bank account

Dr

Cr

Particulars

Amount (GBP)

Particulars

Amount (GBP)

To capital A/c

10000

By purchase A/c

4000

To sales

1500

By delivery van A/c

2000

By suppliers' A/c

800

By rent A/c

200

By drawings A/c

100

By balance c/d

4400

11500

11500

Purchase account

Dr

Cr

Particulars

Amount (GBP)

Particulars

Amount (GBP)

To bank A/c

4000

To suppliers' A/c

1000

By balance c/d

5000

5000

5000

Delivery van account

Dr

Cr

Particulars

Amount (GBP)

Particulars

Amount (GBP)

To bank A/c

2000

By balance c/d

2000

2000

2000

Suppliers' account

Dr

Cr

Particulars

Amount (GBP)

Particulars

Amount (GBP)

To bank A/c

800

By purchase A/c

1000

To balance c/d

200

1000

1000

Sales account

Dr

Cr

Particulars

Amount (GBP)

Particulars

Amount (GBP)

By bank A/c

1500

By cutomers' A/c

5000

To balance c/d

6500

6500

6500

Rent account

Dr

Cr

Particulars

Amount (GBP)

Particulars

Amount (GBP)

To bank A/c

200

By balance c/d

200

200

200

Drawings account

Dr

Cr

Particulars

Amount (GBP)

Particulars

Amount (GBP)

To bank A/c

100

By balance c/d

100

100

100

 

Customers' account

Dr

Cr

Particulars

Amount (GBP)

Particulars

Amount (GBP)

To sales

5000

By balance c/d

5000

5000

5000


b. Trial balance

Trial balance as on 9th January

Particulars

Amount (GBP)

Amount (GBP)

Dr

Cr

Capital

 

10000

Bank

4400

Purchase

5000

Delivery van

2000

Suppliers

 

200

Sales

 

6500

Rent

200

Drawings

100

Customers'

5000

Total

16700

16700


c. Income statement

Income statement for the first 9 days

Particulars

Amount (GBP)

Amount (GBP)

Sales revenue

 £                         6,500.00

Add. Other revenue

 £                                      -  

Total revenue from operations

 £                         6,500.00

Expenses

Purchase expenses

 £                         5,000.00

Rent

 £                             200.00

Total expenses

 £                         5,200.00

Net profit

 £                         1,300.00


d. Financial position statement

Financial position statement as on 9th January

Particulars

Amount (GBP)

Amount (GBP)

ASSETS

Non-current assets

Delivery van

 £                         2,000.00

Total Non-current assets

 £                         2,000.00

Current assets

Trade receivables

   Customers'

 £                         5,000.00

Cash and cash equivalent

   Bank balance

 £                         4,400.00

Total current assets

 £                         9,400.00

Total assets

 £                       11,400.00

CAPITAL AND LIABILITIES

Capital

 £                       10,000.00

Add. Net profit for the period

 £                         1,300.00

Less. Drawings

-£                            100.00

Total capital fund

 £                       11,200.00

Non-current liability

0

Current liability

Trade payables

   Suppliers'

200

Total current liability

 £                             200.00

Total capital and liability

 £                       11,400.00

Case 3

Income statement

Income statement for the year ended 31 December 2005

Particulars

Amount (GBP)

Amount (GBP)

Revenue from operations

365200

Less. Return

-1200

Net sales revenue

364000

Other revenue

0

Total revenue

364000

Less. Expenses

Purchase Less return

265200

Changes in inventory

-2340

Wages

46160

Rent less advance (GBP13000- GBP 1000)

12000

Motor expenses

3720

Insurance

760

Irrecoverable Debts

120

Further bad debt

130

Allowance for receivable (Opening)

-588

Allowance for receivable (Closing) (Note 2)

516

Discounts allowed

864

Discount received

-1622

Depreciation and amortisation expenses (Note 1)

11128

Light and heat add outstanding (GBP 3074+ GBP 460)

3534

Bank overdraft interest

74

Appreciation of land

-150000

Total expenses

189656

Net profit before tax

174344

Financial position statement

Financial position statement as on 31 December 2005

ASSETS

Amount (GBP)

Amount (GBP)

Non-current assets

Land

250000

Building

92000

Motor vehicle

8232

Fixtures and fittings

5600

Total non-current assets

355832

Other non-current assets

Current assets

Receivable (Note 2)

16684

Inventory

25680

Cash and cash equivalent

3412

Prepaid rent

1000

Total current assets

46776

Total assets

402608

 
 

EQUITY AND LIABILITIES

Amount (GBP)

Amount (GBP)

Capital

225600

Add. Net profit after tax

174344

Less. Drawings

-20800

Net capital fund

379144

Non-current liabilities

0

Current liabilities

Trade payables

23004

Outstanding light and heat

460

Total current liabilities

23464

Total capital and liability

402608


Notes to accounts

Note 1

Calculation of total depreciation and amortisation expenses

Motor vehicle

 

Cost price

 £     24,000.00

Less. Aggregate depreciation

 £     12,240.00

Written down value

 £     11,760.00

 

Depreciation @30 of reduced value

 

 £       3,528.00

 

Fixture and fittings

 

Cost

 £     28,000.00

Estimated life (years)

5

Depreciation

 

 £       5,600.00

 

Building

 

Cost

 £   100,000.00

Depreciation @2% on cost price

 

 £       2,000.00

 

Total depreciation and amortisation

 £     11,128.00


Note 2

Calculation of allowance for receivables

Receivables

 £     17,330.00

Less. Further bad debts

 £          130.00

Net receivables

 £     17,200.00

 

Allowance for receivables @3%

 £          516.00

Closing receivable

 £     16,684.00

Case 4

Bank reconciliation statement at December 1

Bank reconciliation statement at December 1

Particulars

Amount (GBP)

Amount (GBP)

Bank balance as per Bank Statement on December 1

 

17478

Add. Cheque received but not deposited

 

176

     

Less. Cheque issued but not encashed

426

 

Less. Cheque issued but not encashed

737

 
   

1163

Bank balnce as per Cash book on December 1

 

16491


Cash book


Cash book

Date

Particulars

Amount (GBP)

Date

Particulars

Chq No.

Amount (GBP)

December

   

December

   

1

Balance b/f

16491

1

Alexander

782

857

2

Able

962

6

Burgess

783

221

 

Baker

1103

14

Barry

784

511

10

Charlie

2312

17

Cook

785

97

14

Delta

419

24

Hay

786

343

21

Echo

327

29

Rent

787

260

23

Cash sales

529

 

Standing charges

 

47

30

Fred

119

 

Bank charges

 

137

     

31

Balance

 

19789

   

22262

     

22262


Bank reconciliation statement at December 31

Bank reconciliation statement at December 31

Particulars

Amount (GBP)

Amount (GBP)

Bank balance as per Bank statement on December 31

 

19738

Less. Cheque issued but not encashed

97

 

Less. Cheque issued for rent but not encashed

260

 

Add. Bank charges

47

 

Add. Rates

137

 

Add. Withdrawal

297

 

Add. Withdrawals

111

 
     

Bank balance as per cash book on December 31

 

19973

Case 5

Process of reconciliation of control accounts

In the reconciliation of control accounts, the errors of an accounting statement are rectified. According to Edwards (2013), the rectification entries depend upon the actual entries and the wrong entries, and therefore, the accountants are required to adjust the above stated entries to make rectification entries. In this context, it is to mention that the wrong entries are replaced by the correct entries to make the rectification of error journal entries (May, 2012). The accountants are to identify the errors initially to make the rectification. After that the correct entries are required to be applied to make the required corrections.


Different types of accounts and process of reconciliation


The rectification of errors could be made on the real account, nominal account and the personal accounts. First of all, the degree of errors is needed to be identified by the accountants in order to make the rectifications. In this context, Horngren et al. (2012) stated that the errors in accounting could take place by omissions. On the other hand, the errors could be single sided or double sided. In this regard, it is to mention that single sided errors and the errors or omissions are to be rectified by using the suspense account as these errors are generally found after preparing the trial balance.


In the books of …

Journal entries

Particulars

Dr

Cr

Amount (GBP)

Amount (GBP)

Cash A/c                                 Dr.

100

   To sales A/c

100

(Being cash sales not entered in the accounting nooks, now rectified)

Rates expenses A/c                 Dr.

500

   To Rent expenses

500

(Being rates expenses wrongly entered, now rectified)

Noncurrent assets A/c             Dr.

1000

   To Repairs

1000

(Being noncurrent assets purchased, wrongly entered in the repairs account, now rectified)

Suspense A/c                          Dr.

200

   To Rent

200

(Being rent expenses wrongly accounted, now rectified)

Sales A/c                                Dr.

200

   Suspense A/c

200

(Being sales account overcast, now adjusted)

Cash A/c                               Dr.

9

   To sales

9

(Being cash sales wrongly entered in the books, now rectified)

Sales A/c                               Dr.

400

   To Cash

400

(Being cash sales wrongly entered in the books, now rectified)


Suspense A/c

Dr.

          

                           Cr.

Particulars

Amount (GBP)

Particulars

Amount (GBP)

To Rent

200

By Sales

200

200

200

Conclusions

This study focused on the tools of financial accounting. The researcher has found that the journal entries help to prepare ledgers and trial balances are prepared from the ledger accounts. Moreover, the researcher has also seen that the final accounts are prepared from the trial balances. Therefore, it can be said the financial accounting is a continuous process.

References

Edwards, J.R., (2013). A History of Financial Accounting (RLE Accounting) (Vol. 29). Routledge.


Horngren, C., Harrison, W., Oliver, S., Best, P., Fraser, D. and Tan, R., (2012). Financial accounting. Pearson Higher Education AU.


May, G.O., (2013). Financial accounting. Read Books Ltd.    


Weil, R.L., Schipper, K. and Francis, J., (2013). Financial accounting: an introduction to concepts, methods and uses. Cengage Learning.

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