Financial Accounting (1) (1)

Assessment Front Sheet Programme:

BTEC Higher National Diploma (HND) in Business- RQF

Unit Number:

Unit 10

Unit Type:

Optional

Unit Title:

Financial Accounting

Unit code:

A/508/0496

UnitLevel:

4

Credit Value

15

TQT

150

Tutor Name: Email: Learner’s name and statement of authenticity Learner’s Name: Learner’s ID:

Date handed-in: I certify that the work submitted for this assignment is my own. Where the work of others has been used to support my work then credit has been acknowledged.

Key dates Distribution date:

04/09/2017

Submission date:

08/12/2017

Return date:

4 weeks after submission

Introduction Balancing the books is at the heart of all business management. The overall aim ofthis unit is to introduce students to essential financial accounting principles andtechniques which will enable them to record and prepare basic final accounts. Students will learn how to prepare accounts for Sole traders and partnerships as well as limited companies. On successful completion of this unit students will be able to contribute effectively to the accounting function of an organisation, or to understand how to record and prepare basic financial accounts for their own business. They will have the knowledge and skills required to progress to a higher level of study.

BTEC HND in Business/ Unit 10: Financial Accounting /Sep 2017

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By the end of this unit students will be able to: 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.

LO3.

Perform bank reconciliations to ensure company and bank records are correct.

LO4.

Reconcile control accounts and shift recorded transactions from the suspense accounts to the right accounts.

Submission Format: Formal report - LO1, LO2, LO3 &LO4 : (Task 1) The submission is in the form of an individual written report . The Report should be covering LO1, LO2 , and LO3& LO4 (Task 1). This should be written in a concise, formal business style using single spacing and font size 12. You are required to make use of table of content; 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. A brief Harvard reference guide is attached in the end of this assignment for you to use. The recommended word limit is 2,500 –3,000 words, although you will not be penalised for ex ceeding the total word limit.


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Case Study:

Case 1

Norris notes down the following transactions that happened in June. Record these transactions using ledger accounts (1) Sell goods for cash for £160. (2) Pay insurance premium by cheque – £4000. (3) Sell goods for £2500 – the customer will pay in a month. (4) Pay £500 petrol for the delivery van. (5) Buy £1700 goods for resale on credit. (6) Take £570 out of the business for living expenses. (7) Buy another£400 goods for resale, paying cash. (8) Buy a new computer for the business for £8000


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Case 2

Matthew set up a business and in the first nine days of trading the Following transactions occurred: (1)January- Matthew introduces £10,000 capital by cheque. (2)January- Matthew buys supplies worth £4,000 and pays by cheque. (3)January- Matthew buys a delivery van for £2,000 and pays by cheque. (4)January- Matthew buys £1,000 of purchases on credit. (5)January- Matthew sells goods for £1,500 and receives a cheque of that amount. (6)January- Matthew sells all his remaining goods for £5,000 on credit. (7)January- Matthew pays £800 to his supplier by cheque. (8)January- Matthew pays rent of £200 by cheque. (9)January- Matthew draws £100 for living expenses from the business bank account.

Questions: (a) Complete the relevant ledger accounts. (b) Extract a trial balance. (c) Prepare the income statement for the first nine days. (d) Prepare the Statement of financial position as at 9 January.


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Case 3 Kevin Suri carries on business as a retail trader. The trial balance of his business as at 31 December 2005 was as follows:


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Case 3- continued

A full year’s depreciation is charged in the year of acquisition and none in the year of disposal.

Prepare an income statement for the year ended 31 December 2005 and a statement of financial position as at that date for Kevin Suri


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Case 4


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Case 4- continued


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Case 5

Provide the journal to correct each of the following errors: (1) A cash sale of £100 was not recorded. (2) Rates expense of £500, paid in cash has been debited to the rentaccount in error. (3) A noncurrentasset purchase of £1,000 on credit has been debitedto the repairs expense account rather than an asset account. (4) A rent bill of £1,200 paid in cash has been debited to the rentaccount as £1,400 and a casting error on the sales account hasresulted in sales being overstated by £ 200. (5) A cash sale of £76 has been recorded as £67. (6) A cash sale of £200 has been debited to sales and credited tocash.


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ASSIGNMENT REQUIREMENT:

LO1, LO2, LO3 & LO4 (Task 1) (You are a Junior Financial Accountant for a medium-sized enterprise company. You have been asked to record the financial transaction of the company in the orderly manner. You will be applying double entry bookkeeping, preparing trial balance and you will be reconciling the accounts for your business.)

P1: Apply the double entry book-keeping system of debits and credits. Record sales and purchases transactions in a general ledger from Case

1

Expected Answer Guide: [Business transactions: Giving consideration to the types of business transactions (sales, purchases, receipts and payments) and the regulations which apply to financial accounting. Double entry book-keeping: Double entry recording in sales, purchases, cash disbursement and cash receipt journals before posting to the ledger accounts. Manual and electronic systems will be introduced and how, why and when these are used. Effectively recording debits and credits; regulations that apply t o financial accounting.]

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

Case 2- question (a) M1: Analyse sales and purchase transactions to compile a trial balance using double entry bookkeeping appropriately and effectively from Case

2- question (b)

D1:Record correctly transactions and produce an accurate trial balance by completing the balance off of ledger accounts, checking that each transaction is recorded in line with accepted accounting principles from Case

2- question (a & b)

Expected Answer Guide: [Trial balance: Understanding how the trial balance is produced and its role in the identification and rectification of errors; the components of a trial balance and their importance will be considered.]


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P3: Prepare final accountsfrom given trial balancefigures adjusting foraccr uals, depreciation and prepayments from Case

3

P4: Produce final accountsfor a range of examplesthat include sole-traders,partnerships or limitedcompanies.

M2: Analyse profit and lossaccounts, balance sheetand cash flow statementsappropriate for the given examples from Case

3

D2: Apply appropriate andaccurate calculations forthe constructing of the final accounts in Case 3. Expected answer guide: [Financial reports and financial statements: What is the difference between the two? How, why and when are each one produced? Different types of financial statements and what they cover. Adjustments required for accruals, prepayments, bad debts, etc. Types of accounts: Preparing final accounts (e.g. for sole-traders, partnerships or limitedcompanies). Principles and conventions: Understanding accounting rules and principles.Understanding the concepts and conventions of consistency and material disclosure.]

P5: Apply the bank reconciliation process to prepare a number of bank reconciliations from Case

4

M3: Apply the reconciliationprocess demonstrating the use of deposit in transit, outstanding checks and Not Sufficient Funds (NSF)check.

D3: Prepare accurate bank reconciliations that apply appropriate tools and techniques to check general accounts and balance sheets from Case

4

Expected answer guide: [Bank reconciliation: What is meant by bank reconciliation and why is it required? How is this achieved? Why is this necessary? Who would be interested in the outcome of a reconciliation? The process of reconciliation: Ensuring that all entries relating to a particular period are correctly entered in the ledger system to support the preparation of the profit and loss account and balance sheet. Using tools and techniques to check general accounts and balance sheets against liquid holdings and cash reserves. Variances: Identifying variances through a bank reconciliation. Dealing with negative and positive v ariances When is a negative variance a positive and vice versa? Ensuring the same entry for every debit and credit entry, and that the balance for each account is calculated and entered correctly.]


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P6: Explain the process taken to reconcile control accounts and clear suspense acco unts using account examples.

M4:Demonstrate understanding of the different types of accounts and how and why they are reconciled. D4: Produce accurate accounts that have been reconciled applying the appropriate methods fromCase

5.

Expected answer guide: [Control accounts: What are they? How and why are they used? How do they support effective financial management? Suspense accounts: How do they differ from control accounts? Why are they required? How are funds in suspense accounts legally protected? Reconciling these accounts: Why is reconciliation required? How is this conducted? The role of debtors and creditors accounts.]

Recommended Resources

Recommended Resources ATRILL, P. and McLANEY, E. (2012) Accounting and Finance for Non-Accounting Specialists. 8th Ed. Harlow: Pearson. DYSON, J. R, (2010) Accounting for Non-Accounting Students. 8th Ed. London: Prentice Hall. GLAUTIER, M. (2010) Accounting Theory and Practice. Harlow: Prentice Hall. LOUGHRAN, M. (2011) Financial Accounting for Dummies. New Jersey: WileyPublishing. MCLANEY, E. and ATRILL, P. (2012) Accounting: An introduction. 6th Ed Harlow:Pearson.

Journals Journal of Accounting, Auditing and Finance Journal of Business Finance and Accounting International Journal of Managerial and Financial Accounting

Links BTEC HND in Business/ Unit 10: Financial Accounting /Sep 2017

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This unit links to the following related units: Unit 5: Management Accounting Unit 13: Financial Reporting Unit 14: Advanced Management Accounting Unit 15: Financial Management Unit: Managing and Running a Small Business

Assignment submission instructions 1. Go to the following website: www.turnitinuk.com 2. Click on “Create an Account” 3. At the bottom of the page you will find a list: Students, Instructor, Teaching assistant. Click on “Student” 4. On the new page you will have to provide this information: Class ID  Class enrolment password  Your first name  Your last name  Email address  Your password (it must be 6-12 characte rs long and contain at least one lette r and one  number) Select a secret question and write down your answer  5. Click on “I agree –Create Profile” 6. Done. a. You are now registered and can enrol into other classes. In order to do that, click on “Enrol in a class”. Enter Class ID and Enrolment password for that subject. 7. Please make sure you download and attach an assignment cove r page from the e-learning. Cover page can be found under “Instructions” tab of the student area (e-learning). 8. If you still have any questions or need any help, please contact to personal tutor(s).

Achievement of a pass, merit and distinction grade A pass grade is achieved by meeting all the requirements defined in the assessment criteria for each individual unit. All the assessment criteria and merit grade descriptors need to be completed within a unit to achieve a merit grade. All the assessment criteria, merit and distinction grade descriptors must be completed within a unit to achieve a distinction grade.


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Plagiarismand Collusion Any act of plagiarism and collusion will be seriously dealt with according to the regulations. In this context the definition and scope of plagiarism are presented below: “Using the work of others without acknowledging source of information or inspiration. Even if the words are changed or sentences are put in different order, the result is still plagiarism” (Cortell 2003).

Collusion describes as the submission of work produced in collaboration for an assignment based on the assessment of individual work. When one person shares his/her work with others who submit part or all of it as their own work.

Submission work should be Microsoft word files in Turn it in. If submission is done in picture format, learner may be asked to submit in word format again for plagiarism check. Extension and Late Submission If you need an extension for a valid reason, you must request one using a coursework extension request form available from the college. Please note that the lecturers do not have the authority to extend the coursework deadlines and therefore do not ask them to award a coursework extension. The completed form must be accompanied by evidence such as a medical certificate in the event of you being sick.

Reference Guide

Harvard Referencing System We expect students to use the alphabetical or name-date method known as the HARVARD system. There are two parts in this system:

1. Citation within text or body of the report: In this the author's surname and year o f publication are cited in the text, e.g. (Bond, 2004).

2. Reference List: A reference list (of these citations) is included at the end of the assignment, in alphabetical order by author. The reference list also includes additional details such as the title and publisher. A bibliography lists relevant items that you have used in the preparation of the assignment but not cited in your text. A bibliography should also be in the Harvard style and the inclusion of such a list shows that you have read widely beyond the items you have cited.

Examples of citation within text or body of the report:


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1. Cormack (1994, p.32-33) states that................ 2............. This view has been supported in the work of Cormack (1994, p.32-33). 3. Jones (1946) and Smith (1948) have both shown……

4. Corporate Author: 1st citation: Royal College of Nursing (RCN), 2007 2nd citation: RCN, 2007

Examples of listings in reference list: 1. Books with one author: Redman, P., 2006. Good essay writing: a social sciences guide. 3rd ed. London: Open University in assoc. with Sage.

2. Books with two, three or four authors: The required elements for a reference are: Authors, Initials, Year. Title of book. Edition. Place: Publisher Kirk, J. &Munday, R.J., 1988. Narrative analysis. 3rd ed. Bloomington: Indiana University Press. Page 11 of

12 BTEC HND in Business/ Managing Human Resources/May 2013 3. Books with more than four authors: For books where there are more than four authors, use the first author only with surname and initials followed by ―et al‖. The required elements for a reference are:

Author, Initials., Year. Title of book. Edition. (only include this if not the first edition) Place: Publisher Grace, B. et al., 1988. A history of the world. Princeton, NJ: Princeton University Press.

4. E-books For e-books the required elements for a reference are : Author, Year, title of book. [type of medium] Place of publication: Publisher Fishman, R., 2005.The rise and fall of suburbia. [e-book]. Chester: Castle Press. If available at website: Fishman, R., 2005. The rise and fall of suburbia. [e-book]. Chester: Castle Press. Available at: libweb.anglia.ac.uk / E-books [accessed 5 June 2005].

5. Journal articles Author, Initials., Year. Title of article. Full Title of Journal, Volume number (Issue/Part number), Page numbers. Perry, C., 2001. What health care assistants know about clean hands.Nursing Times, 97(22), p.63-64.

6. Newspaper articles Author, Initials., Year. Title of article.Full Title of Newspaper Day and month before page numbers of article. Slapper, G., 2005. Corporate manslaughter: new issues for lawyers. The Times, 3 Sep. p.4-5.


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3. Books with more than four authors: For books where there are more than four authors, use the first author only with surname and initials followed by ―et al‖.

The required elements for a reference are: Author, Initials., Year. Title of book. Edition. (only include this if not the first edition) Place: Publisher Grace, B. et al., 1988. A history of the world. Princeton, NJ: Princeton University Press.

4. E-books For e-books the required elements for a reference are : Author, Year, title of book. [type of medium] Place of publication: Publisher Fishman, R., 2005.The rise and fall of suburbia. [e-book]. Chester: Castle Press. If available at website: Fishman, R., 2005.The rise and fall of suburbia. [e-book]. Chester: Castle Press. Available at: libweb.anglia.ac.uk / E-books [accessed 5 June 2005].

5. Journal articles Author, Initials., Year. Title of article. Full Title of Journal, Volume number (Issue/Part number), Page numbers. Perry, C., 2001. What health care assistants know about clean hands.Nursing Times, 97(22), p.63-64.

6. Newspaper articles Author, Initials., Year. Title of article.Full Title of Newspaper Day and month before page numbers of article. Slapper, G., 2005. Corporate manslaughter: new issues for lawyers. The Times, 3 Sep. p.4-5.

7. Journal articles from an electronic source Boughton, J.M., 2002. The Bretton Woods proposal: an indepth look. Political Science Quarterly, [online]. 42 (6), Available at: http://www.pol.upenn/articles (Blackwell Science Synergy) [accessed 12 June 2005].

8. Internet National electronic Library for Health. 2003. Can w alking make you slimmer and healthier? (Hitting the headlines article) [Online]. (Updated 16 Jan 2005) Available at: http://www.nhs.uk.hth.walking [accessed 10 April 2005]. The title of a web page is normally the main heading on the page.

9. E-version of annual reports Marks & Spencer, 2004.Annual report 2003 -2004.[Online]. Available at: http://www-marks-andspencer.co.uk/corporate/annual2003/ [accessed 4 June 2005].


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Financial Accounting (1) (1)

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