ASSIGNMENT BRIEF Student Name/ID Number Unit Number and Title HNBS 310 Financial accounting Academic Year XXXXXXXXXXUnit Tutor Muhammad Sajid Assignment Title Financial Accounting Issue Date 6 th June 2018 Submission Date 12th August 2018 IV Name & Date F Khan (1/6/2018) Assignment 1 – LO1 Record business transactions using double entry book-keeping, and be able to extract a trial balance. LO2 Prepare final accounts for sole traders, partnerships or limited companies in accordance with appropriate principles, conventions and standards. Submission Format – Report Guideline for preparing and submission: The submission is in the form of an individual written report. This should be written in a concise, formal business style using single spacing and font size 12. You are required to make use of headings, paragraphs and subsections as appropriate, and all work must be supported with research and referenced using the Harvard referencing system. Please also provide a bibliography using the Harvard referencing system. The recommended word limit is 1,000 words, although you will not be penalised for exceeding the total word limit. Assignment Brief and Guidance Scenario You are a Junior Accountant in a small accountancy firm and as per your job description you perform all bookkeeping tasks e.g. Preparing the primary books from the source documents, preparing the General ledger, Sales Ledger, Purchase Ledger, various reconciliation including sales ledger control account reconciliation, purchase ledger control account reconciliation, bank reconciliation, PAYE reconciliation, VAT Reconciliation, Sales Reconciliation, preparation of fixed asset reconciliation etc and extracting the trial balance to prepare the statutory accounts. Question 1: Muhammad starts business on 1 June 2016. The following transactions take place in his first month of trading. 01/06/2016 He invests £65,000 into a business. 02/06/2016 He Purchases £ 8,000 worth of goods on credit. 07/06/2016 He sells a quarter of the inventory for £ 4,000 cash. 08/06/2016 He issues a cheque to pay for half of the goods he received on credit. 14/06/2016 He pays her insurance for January by issuing a cheque of £75. 15/06/2016 He sells her remaining inventory for £12,000 on credit. 16/06/2016 He purchased goods on credit for £ 10,000 18/06/2016 He purchases some computer equipment for £3,000 cash. 20/06/2016 He pays her rent for January by cheque for £150. 21/06/2016 He sells half her inventory for £10,000 cash. 25/06/2016 He withdraws £100 from the bank and put it into the petty cash tin (this is cash in hand) 30/06/2016 He purchases some stationary worth £30 taking money from the petty cash tin. Required: For the first month of trading prepare: 1. The journal entries for each transaction. 2. The Ledger accounts 3. The trial balance Question 2: Carol Andrew owns a retail business. On 31 December 2017 the following trial balance was extracted from the accounts of the business after the preparation of the trading account for the year ended 31 December 2007. £ £ Capital 120,800 Drawings 5,150 Bank 10,594 Cash 340 Debtors and creditors 12,500 3,900 Purchases and Sales 75,000 125,000 Returns 1,000 1,500 Motor van at Cost 25,000 interest received 1000 Loan given @ 10% 100,000 Accumulated depreciation 5,400 Wages & Salaries 13,200 Rent and Rates 1,500 Postage 900 Insurance 7,500 Provision for bad debts 934 bad debts 1,200 Rent received 4,850 Stock at 1 January 2007 9, XXXXXXXXXX,384 263,384 Additional information. 1. Business rates £340 is Outstanding and insurance £411 is prepaid. 2. Rent receivable £ 490 has been received in advance 3. Depreciation should be provided on Motor Van at 20% per annum using the straight line method. 4. Bad debts should be written off £ XXXXXXXXXXValue of the Closing Stock is £1,000 Required: Prepare a profit and loss account for the year ended 31 December 2017 and balance sheet at that date. Learning Outcomes and Assessment Criteria Pass Merit Distinction LO1 Record business transactions using double entry book-keeping, and be able to extract a trial balance. D1 Correct recording of transactions and the production of an accurate trial balance by completing the balance off of ledger accounts, checking that each transaction is recorded in line with accepted accounting principles. P1 Apply the double entry bookkeeping system of debits and credits. Record sales and purchase transactions in a general ledger. P2 Produce a trial balance, applying the use of the balance off rule to complete the ledger. M1 Analyse sales and purchase transactions to compile a trial balance using double entry book-keeping appropriately and effectively LO2 Prepare final accounts for sole traders, partnerships and limited companies in accordance with appropriate principles, conventions and standards. D2 Apply appropriate and accurate calculations for the constructing of the final accounts. P3 Prepare final accounts from given trial balance figures, adjusting for accruals, depreciation and prepayments. P4 Produce final accounts for a range of examples that include sole traders, partnerships or limited companies. M2 Analyse profit and loss accounts, balance sheet and cash flow statements appropriate for the given examples Assignment 2 - Applying management accounting techniques responding to financial problems Submission Format - Report The submission is in the form of an individual written report. This should be written in a concise, formal business style using single spacing and font size 12. You are required to make use of headings, paragraphs and subsections as appropriate, and all work must be supported with research and referenced using the Harvard referencing system. Please also provide a bibliography using the Harvard referencing system. The recommended word limit is 1,000 words, although you will not be penalised for exceeding the total word limit. Learning Outcomes LO3 Perform reconciliations of bank statements, control accounts and clearing suspense accounts. LO4 Reconcile control accounts and clear suspense accounts. Assignment Brief and Guidance You are working in the same firm, at the end of the month you have received the bank statement the trainee accountant has prepared the cash book, however the closing balance at the cash book does not match with closing balance of the bank statement. More over the trial balance for one of the clients account does not balance trainee accountant has transferred the difference to suspense account. You have been asked to perform the various reconciliation as under. You must answer the following: Question 1 Mr. Akram received his monthly bank statement on 28th February 2017 and found the following transactions which not shown either in cash book or bank statement On the end of February his cash book shows £1,760 Dr Where as his bank statement shows £3,093 Cr. 1- Cheque amounting for amount £270 drawn in the favour of D Park but not presented for the payment till at the end of the month. 2- Mr. Petal transfer £1070 to Akram’s bank directly. 3- Insurance against fire to Tesco Insurance amount £170 has been paid by bank directly. 4- Talk Talk monthly bill for amounting £56 paid by the bank 5- Mr. Akram withdrew £105 for personal use but not reflected in the current bank statement. 6- Bank collected £325 as dividend from ABBEY bank. 7- Arif paid us cheque £186 which has been recorded in the cash book but did not credited in the bank statement. 8- Bank charges £25 shown in the bank statement. (a) You are required to prepare the updated cash book as at 28th February XXXXXXXXXXRevised Cash Book (as per Bank Column) Date Dr. £ Date Cr. £ Draw up a bank reconciliation statement as on 28th February 2010: (a) Explain the following terms and give example where possible: What is the basic difference between direct debit and standing order, Bank charges, Dis-Houner Cheque Question 2 Milky prepared her draft final accounts for the year ended 30 May 2009 and failed to agree both the sides and difference of £ 1976 is posted on the debit side of the trial balance. Calculated a net profit for the year of £ XXXXXXXXXXGoods, £2000, purchased on credit from A Musa had not been entered in the accounting records. 2- Purchases of delivery van £670 by cheque is correctly entered in van account but twice in cash book 3- Goods, £650, sold on credit to G Tahir had been correctly entered in the sales account but had been entered into the account of G Tahir 4- Electricity bill amounting £790 is correctly entered in cash book but not recorded in general ledger 5- A motor vehicle expense, £500, for the year had been posted to the motor vehicles account. 6- Sales day book was total correctly as £1030 but brought forwarded as £1300 in sales account 7- A discount received from L Samantha of £190 had been entered in the discount allowed column in the cash book and credited to the account of L Samantha. 8- Payment received from D Jones £384 by cheque but recorded on the debit side of sales ledger account. (a)-Prepare the journal entries required to correct each of the errors. (b) Prepare the Suspense account which shows the rectification of difference amount. Learning Outcomes and Assessment Criteria Pass Merit Distinction LO3 Perform bank reconciliations to ensure company and bank records are correct D3 Prepare accurate bank reconciliations that apply appropriate tools and techniques to check general accounts and balance sheets P5 Apply the bank reconciliation process to prepare a number of bank reconciliations. M3 Apply the reconciliation process demonstrating the use of deposit in transit, outstanding checks and Not Sufficient Funds (NSF) check. LO4 Reconcile control accounts and shift recorded transactions from the suspense accounts to the right accounts D4 Produce accurate accounts that have been reconciled applying the appropriate methods. P6 Explain the process taken to reconcile control accounts and clear suspense accounts using given account examples. M4 Demonstrate understanding of the different types of accounts and how and why they are reconciled.