Unit 10 – Financial Accounting Assignment Help
I would like to express my special thanks of gratitude to my lecturer Mr.Nigarshan who gave me the golden opportunity to do this Financial Account case study review, which also helped me in doing a lot of researches and I came to know about so many new things.
Also, I thank my lecturer Mr.Niruban once again for her invaluable guidance, friendly advices, effective feedbacks and encouragement given to me during my case study. To be honest, she I have learnt a lot during my preparation of this case study, and I am truly grateful to her as she helped me to see my case study in a new light. I also wish to express my gratitude ESOFT Metro Campus Batticaloa –Friends to complete my report works.
This report applied the double entry book-keeping system of debits and credits. And Recorded sales and purchases transactions in a general ledger. Produced a trial balance applying the use of the balance off rule to complete the ledger And also prepared final accounts from given trial balance figures adjusting for accruals, depreciation and prepayments
Further, applied the bank reconciliation process to prepare a number of bank reconciliations. And explained the process taken to reconcile control accounts and clear suspense accounts using given account examples. Demonstrated understanding of the different types of accounts and how and why they are reconciled.
Analysed sales and purchase transactions to compile a trial balance using double entry book-keeping appropriately and effectively. And also analysed profit and loss accounts, balance sheet and cash flow statements appropriate for the given examples. Applied the reconciliation process demonstrating the use of deposit in transit, outstanding checks and NSF check.
LO3. Perform bank reconciliations to ensure company and bank records are correct
A bank reconciliation is the process of matching the balances in an entity’s accounting records for a cash account to the corresponding information on a bank statement. The goal of this process is to ascertain the differences between the two, and to book changes to the accounting records as appropriate. The information on the bank statement is the bank’s record of all transactions impacting the entity’s bank account during the past month.
A bank reconciliation should be completed at regular intervals for all bank accounts, to ensure that a company’s cash records are correct. Otherwise, it may find that cash balances are much lower than expected, resulting in bounced checks or overdraft fees. A bank reconciliation will also detect some types of fraud after the fact; this information can be used to design better controls over the receipt and payment of cash. (Accounting tools 2019)
Task 04. Reconcile control accounts and clear suspense accounts
A control account is a summary-level account in the general ledger. This account contains aggregated totals for transactions that are individually stored in subsidiary-level ledger accounts. Control accounts are most commonly used to summarize accounts receivable and accounts payable, since these areas contain a large volume of transactions, and so need to be separated into subsidiary ledgers, rather than cluttering up the general ledger with too much detailed information. The balance in a control account should match the total for the related subsidiary ledger. If the balance does not match, it is possible that a journal entry was made to the control account that was not also made in the subsidiary ledger.
(Accounting tool, 2018)
Reconciliation work use to ensure the entries in the sales and purchase ledgers agree with the entries in the control accounts ; the total of both side will be the same If not it indicates an error in either the memorandum account or the control account. All discrepancies should be investigated and corrected.
(Kaplan Financial Knowledge Bank, 2012)
A suspense account is an account where you record unclassified transactions. The account temporarily holds entries while you decide how you will classify them. When open an accounting suspense account, if the transaction is considered in suspense; can open a bank account to hold funds for suspense accounts. Most suspense accounts are cleared out on a regular basis. To be cleared out, the account must have a zero balance. Move suspense account entries into their designated accounts to make the suspense balance zero.
Reason for preparing reconciliation account when the creditor or debtor account and ledger balance are not balancing with each other. For prepare the reconciliation account the company need debtor or creditor control account with a ledger balance.
XYZ business’s creditor ledger balance total is Rs. 81,000 and during the month of 2014. The summary of transactions total purchases is Rs. 630,000. So the company need to prepare the reconciliation account for the reason of unbalanced of creditor ledger balance and creditor control accounts.
When an organisation determines there is difference between creditor control account and creditor ledger account, then organisation need to check opening balance of creditor control account and creditor ledger account as well.
The ledger balance of company XYZ shows a balance of 81,000 while control A/C balance differ from this amount, therefore it should be checked and a reconciliation statement should be prepared.
Due to the unbalance the organisation should identify the errors and such errors should be adjusted. XYZ also need to identify the errors and errors should be adjusted in order to balance the creditor control account and ledger account.
Some of these errors are identified in XYZ PLC and these errors should be adjusted.
Discount received from Asitha for Rs. 3,000.00 have been debited to creditors control account and credited to discount received account. No other entries had been made in this regard.
Debited note of Rs. 4,000.00 sent to Visitha has not been recorded in his account.
Cash sales of Rs. 20,000.00 have been credited to creditors control account.ed Creditor’s Ledger control account
Bragg, S. and Bragg, S. (2019). Bank reconciliation. [online] AccountingTools. Available at: https://www.accountingtools.com/articles/2017/5/17/bank-reconciliation [Accessed 25 Feb. 2019].
Bragg, S. and Bragg, S. (2019). Control account. [online] AccountingTools. Available at: https://www.accountingtools.com/articles/2017/5/4/control-account [Accessed 21 Feb. 2019].
Cameron, A. (2019). What Is a Suspense Account? | Examples and How to Use. [online] Accounting Tips, Training, and News. Available at: https://www.patriotsoftware.com/accounting/training/blog/what-is-suspense-account-journal-entry-example/ [Accessed 21 Feb. 2019].
Kfknowledgebank.kaplan.co.uk. (2019). [online] Available at: http://kfknowledgebank.kaplan.co.uk/KFKB/Wiki%20Pages/Control%20Account%20Reconciliations.aspx [Accessed 20 Feb. 2019].
wohlner, R. (2019). Accounting Basics: Financial Statements. [online] Investopedia. Available at: https://www.investopedia.com/university/accounting/accounting5.asp [Accessed 21 Feb. 2019].
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