Recording Of Transaction & Financial Accounting

PROJECT 1

P1: Double entry bookkeeping system

It has been determining that most of the time managers are looking to make use of various accounting tools and techniques which will be helpful in recording of necessary transaction. Double entry system of accounting means that every financial transaction would include two separate account. The debit and credit norms while double account keeping should be stated in various ways. For every accounting transaction, the total amount recorded on left side of the statement which must be common or equal to total value recorded into other side of the record. It is based on overall fact that all financial transaction which would be equal and having opposite effects in two areas of account. This will be used to satisfy below mentioned equation.

Assets= Liabilities + Equity

Recording of sales and purchase transaction into a general ledger:

It has been found that the general ledger consists of medium and small company’s business statements and every financial transaction would affect those accounts. Business recording transfer to general ledger which is being recorded in the form of journal entries. All the entries must be recorded into the business and have both increase or decrease effects on the overall position of assets and liabilities as well as equity statements of the company. it is vital to initial make evaluation of all records before posting into various statements (Weil, Schipper and Francis, 2013). A journal which is happens to be real book of entry is the first step in accounting process which will be taken into account while record of financial transactions. Some of the effective journal entries as on 1 June, 2016 recorded underneath:

P3: Preparation of financial statements

It is essential for the cited company to make proper evaluation of all necessary financial record of the company so that more reliable outcomes can be incurred during the period of time. The best part of making reliable decision making in near future time is the role of accountant in preparing estimated budgeted by taking into account of various necessary records. It seems to provide necessary idea about profitability and overall position of the company to their management and other concern parties (Beatty and Liao, 2014). All the business transaction is initial recorded into journal, ledger, trail balance and other financial statements. On the basis of all the mentioned various statements, investors used to make reliable decision making for their upcoming projects.

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Comparison among direct debit as well as standing orders, bank costs and cheques dishonour:

Direct debits: It is known as one of the important aspects which will be related with releasing of financial transaction under which one individual withdraws sufficient amount of capital from another accounts. It is related with more recurring payment, such as credit card and their overall bills utility. In case their overall payment of bill is made through using direct debits, it means that the order for the company that is associated with owner of the capital amount. It used to provide valuable convenience to common people those are associated with transferring regular payment of the amount. By the help of this process, every individual used to get all concern powers to gather payment from an individual account as those are particularly provide necessary permission to cited party (Henderson and et. al., 2015). It is make easy for them to manage and control payment but using valuable paper work. It is concern with the necessary instructions that a customer used to provide to the cited bank to minus a sum total without taken into consideration then in that condition gets due. These are mainly taken into account for:

• Common utility of bills and expenses are become more liable in each month. The bank has the right to make payment of them in-steed of asking anything to their customers.
• It must be related to appropriate system that can be taken into account for fixed membership amount, in case all these subscription value become overdue in each month.

Standing orders:

It seems to be proper instruction or detailed process that forced effectively or until changed as per the mentioned situations. Any of the cited rules for guidance and government process which will be endure by successive period until they get repealed. It will be reliable instruction to make valuable to bank payment for specific value of capital at regular period of time from an individual bank statements of various customers. There is certain payment that are related with providing monthly or yearly donations and charity. It is more rigid in nation that is being paid once would not be refunded. It is a kind of reliable facilities those are pre-determine payment that are instructed through a customer to their bank and other financial institution (Renz, 2016). These orders are mainly common that are used in every period such as making payment of loan amount in small instalments and insurance premium etc. It will provide control direct debits which would more flexibility and safety measure. Some concern standing orders are mentioned underneath:

• Making payment those are related with fixed in value and effective period those are based on monthly, weekly or annual basis.
• This happens to provide reliable control to customer over their operating account which is applicable during withdrawal of orders at any point of time.
• Customer would make use of all these system as making proper facilities that are provided from banker as they cannot have any kind of obligations to make use of various regulations.

Bank charges:

It is known as all those bank obligations that used to cover certain amount of charges and fees at the time by providing bank obligations to its customers. This seems to be related with administrative expenses those are mentioned reportedly with the fees generated by the cited company for overall expenditure, while their checking account transactions. In other words, a fee levied on a note through financial sectors. A bank cost can be related with account holders not maintaining a lower balance. There are various important charges those are taken into in respect to various services. Some of them are mentioned underneath:

• In case bank used to provide necessary facility of overdraft that enables account holders to withdrew over a set limited amount for extended period of time.
• ATMs in important facility those are mentioned by banks in case clients using facilities for withdrawing amount as cash through ATMs (Bank charges, 2018). For this purpose, they are providing ATM cards of concern banks that is inserted with unique chips those are specific individual debit certain amount of cash from the bank they are charges certain amount as fees.
• Internet banking is one of the reliable services that would enable an individual to make utilisation of all banking services for using online platforms, bank used to provide certain username and passwords in order to deliver certain amounts of bank charges as fixed amount as fees (Khan, 2015).

Dishonoured cheque:

This refers to the cheque which is returned by the bank in which the account holder has deposited the cheque. The cheque is dishonoured because of various reasons, one of the most common reason behind it is lack of sufficient funds in the account. In case the account holder intentionally issues the cheque with a know how that it does not have sufficient funds then it will be considered criminal offence under the law. Get the best assignment help from experts.

The cheques are dishonoured by the companies under the following discussed circumstances:

• Insufficiency of funds in the account: The dishonour of cheque happens mostly when the company there is no sufficient funds in the bank account of the account holder. So, it is the responsibility of the cheque issuer to check the balance of the bank before the cheque is issued by the holder.
• Stop payment: Many people indulge in such activities, what they do they issue a cheque to some person or entity and then tells the bank to stop the payment to that person which ultimately leads to the dishonour of cheque (Porter and Norton, 2012).

CONCLUSION

From the above project report, it has been concluded that finance is one of the essential aspects for an organisation that can assist in better decision making in near future time. For this purpose, various financial account of the cited companies is needed to be analyse with using various financial records. It will be helpful for attaining better outcomes in coming future time.

REFERENCES 

• Edwards, J. R., 2013. A History of Financial Accounting (RLE Accounting). Routledge.
• Weil, R.L., Schipper, K. and Francis, J., 2013. Financial accounting: an introduction to concepts, methods and uses. Cengage Learning.
• Beatty, A. and Liao, S., 2014. Financial accounting in the banking industry: A review of the empirical literature. Journal of Accounting and Economics. 58(2-3). pp.339-383.
• Henderson, S., and et. al., 2015. Issues in financial accounting. Pearson Higher Education AU.
• Renz, D. O., 2016. The Jossey-Bass handbook of nonprofit leadership and management. John Wiley & Sons.
• Khan, M., 2015. Accounting: Financial. In Encyclopedia of Public Administration and Public Policy, Third Edition-5 Volume Set (pp. 1-6). Routledge.
• Porter, G. A. and Norton, C. L., 2012. Financial accounting: the impact on decision.

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