Question : This assessment will provide certain questions which are like: What are the differences between financial position statement and income statement. What are the methods for reconciliation of suspense and control accounts. Answer : INTRODUCTION Financial Accounting is a branch which is used to put a complete track about the transactions of a company. Under this, proper guidelines and procedures are used to prepare the final accounts of the organization. The transactions are recorded in a perfect sequence so that companies can know that what are the expenses, income and position of the company at the end of the year. The main aim of financial accounting is to summarize everything related to financial transactions going in the business so that it can be useful for taking important decision by all the stakeholders. Financial statements have to be compulsorily disclosed by the companies whose stocks are listed on stock exchange (ScottO'Brien, 2013). In this report, income statement and balance sheet will be prepared for both sole proprietorship and limited company and then a glimpse on the differences between both income statement and balance sheet will be discussed. The report will also include an example of bank reconciliation and the reconciliation of control and suspense accounts. You Share Your Assignment Ideas We write it for you! Most Affordable Assignment Service Any Subject, Any Format, Any Deadline Order Now View Samples You Share Your Assignment Ideas We write it for you! Most Affordable Assignment Service Any Subject, Any Format, Any Deadline Order Now View Samples FINAL ACCOUNTS OF GREG PALMER Statement of P&L A/c of Greg Palmer Dr. Cr. Particulars Amount (£) Particulars Amount (£) To Opening Stock 190000 By Sales 1301500 To Purchases 960000 By Closing Stock 120000 To Wages 330000 By Gross Loss 58500 1480000 1480000 To Gross Loss 58500 By Net Loss 388000 To Outstanding Wages 30000 To Sundry Expenses 165000 Prepaid rent -35000 Outstanding Gas Payment 7500 To Heat & Light 92000 To Depreciation: Furniture & Fittings - 70000 388000 388000 Balance Sheet for Greg Palmer as on.. Liabilities Amount (£) Assets Amount (£) Capital 960500 Account Receivables 120000 Net Loss -388000 Prepaid Rent 35000 Drawings -105000 Closing Stock 120000 Bank Overdraft 50000 Fixtures and fittings 350000 Outstanding Gas Payment 7500 - Depreciation -70000 280000 Outstanding Wages 30000 555000 555000 FINAL ACCOUNTS OF KENNY PATON LTD. Statement of P&L A/c of Kenny Paton Ltd. Dr. Cr. Particulars Amount (£) Particulars Amount (£) To Opening Stock 86000 By Sales 2068000 To Purchases 1054000 By Closing Stock 78000 To Gross Profit 1006000 2146000 2146000 To Distribution Costs 367000 By Gross Profit 1006000 To Administration Costs 287000 To Outstanding Interest 14274 To Outstanding Dividend 152000 To Depreciation: On Plant & Machinery 119700 On Office Equipment 26400 To Outstanding Corporation Tax 30000 To Net Profit 9626 1006000 1006000 Balance Sheet for Kenny Paton as on.. Liabilities Amount (£) Assets Amount (£) £1 ordinary shares fully paid 1520000 Account Receivables 619000 Net Profit 9626 Bank 45000 Dividend declared 152000 Closing Stock 78000 Bank Loan 549000 Premises 1345000 Outstanding Interest 14274 Plant & Equipment 798000 Trade Payables 640000 - Depreciation 119700 678300 Outstanding Corporation Tax 30000 Office Equipment 176000 -Depreciation 26400 149600 2914900 2914900 DIFFERENCES BETWEEN AN INCOME STATEMENT AND STATEMENT OF FINANCIAL POSITION Basis Income Statement Balance Sheet Meaning It is also called profit and loss account and it include all the expenses and revenues that are indirect in nature for that particular period. This is the final statement prepared which includes liabilities or capital and assets of the organization to reveal the position at the end of the financial year. Motive of Preparation This account is made to find out the net loss or net profit of the company which has occurred during the period (Edwards, 2013). This statement is made to reveal the true position of the organization and to find out that actually where the business is standing. Kind of Accounts Incorporated It only consist single account i.e. Nominal It has two kinds of accounts included i.e. Personal and Real Order and dependency It is made before the balance sheet and hence it is not independent of balance sheet. It is made after the profit and loss account is made and hence it is dependent on income statement as the figures of net loss or net profit is taken from there (Warren and Jones, 2018). Balance If there is a balance amount on debit side, then it is Net Loss and if there is a balance on credit side, then it is Net Profit. Both liabilities and assets side should come equal as it shows the accuracy of the final UPTO50% Avail The Benefit Today! To View this & another 50000+ free Enter Email Submit
INTRODUCTION Financial accounting is a specific branch of accounting where involve the procedure of recording, summarizing and reporting the transactions and get result through business activities in certain period of time (Baker and Burlaud, 2015). On the basis of these transactions prepare of
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