Assignment front sheet

Learner name Assessor name

Thinzar Wutthmone Daw Khin Su Su Yin

Date issued Completion date Submitted on

28.2.2020 27.2.2020 28.2.2020

Qualification Unit number and title

Edexcel BTEC Level 5 HND Diploma in Business Financial Accounting

Assignment title Financial Accounting

Criteria To achieve the criteria the evidence must show that Task
Evidence
reference the student is able to: no.

Apply the double entry book-keeping system of debits and credits.

P1
Record sales and purchases transactions in a general ledger.

Produce a trial balance applying the use of the balance off rule to
P2
complete the ledger.

Prepare final accounts from given trial balance figures adjusting for
P3
accruals, depreciation and prepayments.

Produce final accounts for a range of examples that include sole-traders,

P4
partnerships or limited companies.

Apply the bank reconciliation process to prepare a number of bank

P5
reconciliations.

Explain the process taken to reconcile control accounts and clear

P6
suspense accounts using given account examples.

Learner declaration
Learner declaration

I certify that the work submitted for this assignment is my own and research sources are fully acknowledged.

Learner signature: Thinzar Date: 28.2.2020

Table of Contents
Financial accounting....................................................................................................................................3
Purpose of financial accounting...................................................................................................................3
Accounting cycle..........................................................................................................................................3
Source Documents...................................................................................................................................4
Books of Prime Entry...............................................................................................................................4
Double Entry............................................................................................................................................4
Trial Balance............................................................................................................................................4
Year End Adjustment...............................................................................................................................5
Financial Statement.................................................................................................................................5
Historical Cost Concept.............................................................................................................................14
Money Measurement Concept..................................................................................................................14
Business Entity concept.............................................................................................................................14
Dual Aspect Concept.................................................................................................................................15
The Time Interval Concept.........................................................................................................................15
References.................................................................................................................................................16
Financial accounting
Financial accounting is the way toward getting ready budget summaries that organizations'
utilization to demonstrate their budgetary presentation and position to individuals outside the
organization, Including speculators, loan bosses, providers, and clients. The principle goal of
financial accounting is to grandstand an exact and reasonable picture of money related issues
of the organization[CITATION Placeholder3 \l 1033 ].

Purpose of financial accounting

It's important to point out that the purpose of financial accounting is not to report the value
of a company. Rather, its purpose is to provide enough information for others to assess the
value of a company for themselves.

The main purpose of financial accounting is to prepare financial reports that provide
information about a firm's performance to external parties such as investors, creditors, and
tax authorities. Also to provide the information that is needed for sound economic decision
making.

Accounting cycle
The accounting cycle is a procession of steps that begins with the recording of a transaction and ends
with the inclusion of that transaction in the financial statements. There are a series of steps ranging
from 8-9 processes, depending on the method you follow, that are worked through before you can
consider a cycle complete.

These cycles will cumulate into the recorded entries for a particular accounting period whether it be

end of month, quarterly, or yearly[ CITATION Don15 \l 1033 ].

There are six steps in accounting cycle and they are as follow:

 Source Documents
 Books of original entries (Day Book)
 Double Entry
 Trial Balance
 Year End Adjustments
 Financial Statement
Source Documents
Source documents are the physical foundation upon which business transactions are recorded.
Source documents are typically retained for use as evidence when auditors later review a
company's financial statements, and need to verify that transactions have, in fact, occurred.
They usually contain the following information:

 A description of a business transaction

 The date of the transaction

 A specific amount of money

 An authorizing signature

Many source documents are also stamped to indicate an approval, or on which to write down
the current date or the accounts to be used to record the underlying transaction. A source
document does not have to be a paper document. It can also be electronic, such as an
electronic record of the hours worked by an employee, as entered into a company's
timekeeping system through a smartphone[ CITATION Ste192 \l 1033 ].

Books of Prime Entry

A daybook is a book of original entry in which an accountant records transactions by date, as
they occur. This information is later transferred into a ledger, from which the information is
summarized into a set of financial statements. Daybooks are only used in a manual accounting
environment, and so are not commonly found in a modern accounting system [ CITATION Ste18 \l
1033 ].

Double Entry
In a double accounting or bookkeeping system, for each transaction, the amounts need to be
recorded in at least two accounts. All transactions are required for a dual entry system. The
amount entered as debit must be equal to the amount entered as credit [ CITATION Ave04 \l
1033 ].

Trial Balance
Trial Balance is a rundown of shutting adjusts of record accounts on a specific date and is the
initial move towards the planning of financial statements. It is usually prepared at the end of an
accounting period to assist in the drafting of financial statements. The debit balance amounts
are listed in a column with the heading "Debit balances" and the credit balance amounts are
listed in another column with the heading "Credit balances" [ CITATION Can10 \l 1033 ].

Year End Adjustment

Year-end adjustments are journal entries made to various general ledger accounts at the end of
the fiscal year, to create a set of books that is in compliance with the applicable accounting
framework. A number of year-end adjustments may be required, depending on how diligently
the books have been maintained on a monthly basis. The number of these adjustments that are
needed has a direct impact on the time required to close the books [ CITATION Ste182 \l 1033 ].

Financial Statement
Financial statements provide a picture of the performance, financial position, and cash flows of
a business. These documents are used by the investment community, lenders, creditors, and
management to evaluate an entity. There are four main types of financial statements, which
are as follows:

Income statement. This report reveals the financial performance of an organization for the
entire reporting period. It begins with sales, and then subtracts out all expenses incurred during
the period to arrive at a net profit or loss. An earnings per share figure may also be added if the
financial statements are being issued by a publicly-held company. This is usually considered the
most important financial statement, since it describes performance.

Balance sheet. This report shows the financial position of a business as of the report date (so it
covers a specific point in time). The information is aggregated into the general classifications of
assets, liabilities, and equity. Line items within the asset and liability classification are presented
in their order of liquidity, so that the most liquid items are stated first. This is a key document,
and so is included in most issuances of the financial statements.

Statement of cash flows. This report reveals the cash inflows and outflows experienced by an
organization during the reporting period. These cash flows are broken down into three
classifications, which are operating activities, investing activities, and financing activities. This
document can be difficult to assemble, and so is more commonly issued only to outside parties.
Statement of changes in equity. This report documents all changes in equity during the
reporting period. These changes include the issuance or purchase of shares, dividends issued,
and profits or losses. This document is not usually included when the financial statements are
issued internally, as the information in it is not overly useful to the management team [ CITATION
Ste193 \l 1033 ].

Rosy

Journal

Date Particular F Debit Credit

O € €
Oct-1 Land Ac 153,000
Buildings Ac 23,100
Fixtures 3,600
Inventory 2,800
Debtors: Jule 630
: Lilly 410
Cash at bank 17,000
Cash in hand 1800
Creditor: Snoopy 690
:Bobby 2,000
Capital ( Entering the opening balance for Rosy) 199,650

General Ledger

Land Ac

Date Particular FO € Date Particular FO €

Oct-1 Bal. b/d 153,000

Building Ac

Date Particular FO € Date Particular FO €

Oct-1 Bal. b/d 23,100

Fixtures Ac
Date Particular FO € Date Particular FO €
Oct-1 Bal. b/d 3,600

Inventory Ac

Date Particular FO € Date Particular FO €

Oct-1 Bal. b/d 2,800

Capital Ac

Date Particular FO € Date Particular FO €

Oct-1 Bal. b/d 199,650

Stationary Ac

Date Particular F € Date Particular F €

O O
Oct-26 Account Payable 250
Blue

Drawing Ac

Date Particular FO € Date Particular FO €

Oct-9 Cash 225

General Expenses Ac

Date Particular FO € Date Particular FO €

Oct-7 Cash Ac 700
Oct-27 Cash Ac 500
Nov-1 Bal. b/d 1200

Rent Expenses Ac
 Date Particular FO € Date Particular FO €
Oct-18 Bank Ac 1,000

Salaries Ac

Date Particular FO € Date Particular FO €

Oct-30 Bank Ac 720

Purchase Ac

Date Particular F € Date Particular FO €

O
Oct-3 Snoopy 470 Oct 31 Bal. b/d 4060
DoDo 650
W Tone 340
R Foot 290
Oct 21 Snoopy 470
R Foot 360
Oct 30 Bank Ac 1,500
4060 4060
Nov-1 Bal. b/d 4060

Sales Ac

Date Particular FO € Date Particular FO €

Oct-31 Bal. b/d 1481 Oct-6 J Wilson 180
J Allen 136
Army 115
1481 1481
Nov-1 Bal. b/d 1481

(Purchase Return) Return Outward Ac

Date Particular FO € Date Particular FO €

Oct-19 R Foot 30

(Sale Return) Return Inward Ac

 Date Particular FO € Date Particular FO €
Oct-11 J Wilson 40 Oct 31 Bal. b/d 56
Allen 16
56
Nov-1 Bal. b/d 56

Discount Ac

Date Particular FO € Date Particular FO €

Oct-30 Bal. b/d 212 OCT 30 Total Creditor 212

Discount Ac

Date Particular FO € Date Particular FO €

Oct-30 Total debtors 66 Oct 30 Bal. b/d 66

Sales Ledger

Account Receivable ( Jule Ac)

Date Particular FO € Date Particular FO €

Oct 1 Bal. b/d 630 Oct 16 Bank 598
Discount Allowed 32
630
Nov-1 Bal. b/d 630

Account Receivable ( Lily Ac)

Date Particular FO € Date Particular FO €

Oct 1 Bal. b/d 410 Oct 16 Bank Ac 389
Discount 21
Allowed
410 410

Account Receivable (J Wilson)

Date Particular FO € Date Particular FO €

Oct 6 Sale Ac 180 Oct 11 Sale Returned Ac 40
 Oct 16 Bank Ac 133
Discount Allowed 7
180 180

Account Receivable (J Allon)

Date Particular FO € Date Particular F €

O
Oct 6 Sale Ac 136 Oct 11 Sale Returned Ac 16
Oct 16 Bank Ac 114
Discount Allowed 6
136 136

Account Receivable (Army)

Date Particular FO € Date Particular FO €

Oct 6 Sale Ac 115

Purchase Ledger

Ac Payable (Snoopy)

Date Particular F € Date Particular F €

O O
Oct 24 Bank Ac 1529 Oct 1 Bal. b/d 690
Discount Received 81 Oct 3 Purchase Ac 450
Oct 21 Purchase Ac 470
1610 1610

Account Payable (Bobby)

Date Particular F € Date Particular FO €

O
Oct 24 Bank Ac 1900 Oct 1 Bal. b/d 2,000
Discount Received 100
2,000 2,000
 Account Payable (DoDo)

Date Particular FO € Date Particular FO €

Oct 3 Purchase Ac 650

Account Payable ( W Tone)

Date Particular FO £ Date Particular FO €

Oct 3 Purchase Ac 340

Account Payable ( R Foot)

Date Particular FO € Date Particular FO €

Oct 19 Purchase returned 30 Oct 3 Purchase Ac 290
Oct 24 Bank Ac 589 Oct Purchase Ac 360
21
Discount Received 31
650 650

Account Payable (Blue)

Date Particular FO € Date Particular FO €

Oct 26 Stationary Ac 250

Three Column Cash Book

Date Particula F Discoun Cash Bank Date Particula F Discoun Cash Bank
r O t £ £ r O t £ £
Allowed Allowed
£ £
201 Bal. b/d 180 17,00 201 General 700
9 0 0 9 Expenses
Oct- Oct-
 1 7
6 Sales 105 9 Drawing 225
0
16 Julie 32 598 18 Rent 1000
Lily 21 389 24 Snoppy 81 1529
J. Wilson 7 133 Bobby 100
J Allen 6 114 R Foot 31
27 General 500
Expenses
30 Purchase 1500
30 Salaries 720
66 285 18234 212 285 1823
0 0 4
Nov- Bal. b/d 142 10996
1 5

Rosy Retail Store

Trial Balance at 31 October 2019

Account Name F Debit Credit

O
Land Ac 153,000
Building Ac 23,100
Fixtures Ac 3,600
Inventory Ac 2,800
Capital Ac 199,650
Purchase Ac 4,060
Sale Ac 1,481
General Expenses 1,200
Drawing Ac 225
Purchase Returned Ac 30
Sale Return Ac 56
Rent Expenses Ac 1,000
Stationary Ac 250
Salaries Ac 720
Debtor Ac: Amy 115
Creditor Ac: Do Do 650
: W Tone 340
 :Blue 250
Bank Ac 10,996
Cash Ac 1425
Discount Allowed 66
Discount Received 212
202,613 202,613

Historical Cost Concept

The authentic cost concept expresses that organizations must record and record for most
resources and liabilities at their buy or procurement cost. As such, organizations need to record
an advantage on their accounting report for the sum paid for the benefit (My Accounting
Course, 2018).

Money Measurement Concept

The money measurement concept expresses that a business should possibly record a
bookkeeping exchange on the off chance that it very well may be communicated regarding
cash. This implies the focal point of bookkeeping exchanges is on quantitative data, as opposed
to on subjective data (Bragg, 2018).

Business Entity concept

Business entity concept -it is one of the accounting concepts. It makes us understand that the Business is
a separate entity other than the proprietor, creditors, managers.

There should be an appropriate and separate book of account for recording the business transaction.

And all the accounting records should be from the business point of view.

Example- capital is treated as the liability for the business .and capital is treated as the asset for the
owner/proprietor….

But in the book of accounts the capital should be recorded as liability. (this is because all accounting
records should be from the business point of view)[ CITATION Bha19 \l 1033 ].

Dual Aspect Concept

The dual aspect concept states that every business transaction requires recordation in two
different accounts. This concept is the basis of double entry accounting, which is required by
all accounting frameworks in order to produce reliable financial statements. The concept is derived from
the accounting equation, which states that:

Assets = Liabilities + Equity

The accounting equation is made visible in the balance sheet, where the total amount of assets listed
must equal the total of all liabilities and equity. One part of most business transactions will have an
impact in some way on the balance sheet, so at least one part of every transaction will involve either
assets, liabilities, or equity[ CITATION Acc181 \l 1033 ].

The Time Interval Concept

In Accounting, also known as the Accounting Period Concept. Where business operation can be divided
into specific period of time such as a month, a quarter or a year (accounting period)

Final accounts are prepared at the end of the accounting period in one year. Internal accounts can be
prepared monthly, quarterly or half yearly[ CITATION Ans09 \l 1033 ].
References
Accounting Tools, 2018. Dual Aspect Concept. [Online]
Available at: https://www.accountingtools.com/articles/dual-aspect-concept.html
[Accessed 27 February 2020].

Answers, 2009. what is time interval concept?. [Online]

Available at: https://www.answers.com/Q/What_is_time_interval_concept
[Accessed 27 February 2020].

Averkamp, H., 2004. What does double entry mean?. [Online]

Available at: https://www.accountingcoach.com/blog/double-entry-bookkeeping
[Accessed 24 June 2019].

Averkamp, H., 2019. Introduction to Financial Accounting. [Online]

Available at: https://www.accountingcoach.com/financial-accounting/explanation
[Accessed 18 June 2019].

Bhattacharya,, S., 2019. What is business entity concept?. [Online]

Available at: https://www.quora.com/search?q=business+entity+concept
[Accessed 27 February 2020].

Bragg, S., 2018. Daybook. [Online]

Available at: https://www.accountingtools.com/articles/2017/5/6/daybook
[Accessed 23 June 2019].

Bragg, S., 2018. Year-end adjustments. [Online]

Available at: https://www.accountingtools.com/articles/year-end-adjustments.html
[Accessed 25 June 2019].

Bragg, S., 2019. Source documents. [Online]

Available at: https://www.accountingtools.com/articles/what-are-source-documents-in-accounting.html
[Accessed 23 June 2019].

Bragg, S., 2019. Types of financial statements. [Online]

Available at: https://www.accountingtools.com/articles/types-of-financial-statements.html
[Accessed 25 June 2019].

Donnell, C. . O., 2015. What is the accounting cycle?. [Online]

Available at: https://www.quora.com/What-is-the-accounting-cycle?top_ans=17072302
[Accessed 27 February 2020].

Gulko, C. S., 2010. Accounting, Business, and Finance. New York: Infobase Pub..