CAC1024: Principle of Accounting - Accounting Process and Financial Reporting - Accounting Assignment Help

Assignment Task:

Learning outcome:

1. Define Accounting process and illustrate it with an accounting flow chart
2. Describe the different daybooks and show the ways records are made and kept
3. Compare the income statement and balance sheet and look at the features of each
4. Prepare financial statements and analyse the contents for reporting purposes.

Purpose of this assignment:

Accounting is known as the language of business, and as such, it benefits management in many ways. Accounting involves recording transactions and compiling them in reports. An important advantage of accounting information over other types of information is that it is based on numbers, measurable data. It is black and white: you have a profit or you have a loss--the numbers speak for themselves.

The main purpose of this assignment
1. Show how an accounting process is carried out and the different stages of preparing financial records
2. Demonstrate the various day books that are being used and the purpose it serves for producing accurate data
3. Understand how financial reports are prepared and the importance of income statement and balance sheet
4. Compare capital expenditure and revenue expenditure and their effects on financial reporting 

SCENARIO

You have just been employed as a junior accounting officer at JOHAN Enterprise a new business set up by Mr Johan The owner wants to know how to have a proper accounting system and prepare a full set of accounts for tax purposes. He also likes to know what accounting information is available for various decision-making areas. From his request, you are required to fulfil his needs as per questions below.

QUESTION

Transactions for the month of January of a retailer, Johan Enterprise are given as the following.

1. Started in business with RM105,000 cash
2. Put RM90,000 of the cash into a bank account
3. Bought goods for cash RM5,500
4. Bought goods on credit from Eddy RM800; Franky RM930; Smith RM160; Liew RM510
5. Bought stationery on credit from Burtons Ltd RM89
6. Sold goods on credit to Tomy RM170; Eric RM240; Malcolm; RM326; Tim RM204.    
7. Paid rent by cheque RM220
8. Bought furniture on credit from Lorenzo Bhd RM610.
9. Paid salaries in cash RM790.
10. Returned goods to Franky RM30; Smith RM42.
11. Bought van by cheque RM6,500.
12. Received loan from Maybank by cheque RM2,000.
13. Purchases return Tomy RM5; Malcolm RM20.
14. Cash sales RM145
15. Sold goods on credit to Eric RM130, Tim RM410; Paul RM158.
16. Johan paid the following by cheque: Franky RM900; Smith RM118.
17. Received cheques from Paul RM158; Eric RM370.
18. Received a further loan from Maybank by cash RM500.
19. Received RM614 cash from Tim.     

Required:    
        
1. What is Accounting and why is it important in the business world? Describe the Accounting cycle with a flow chart and illustrate how accounting is carried out.     

2. Record the transactions for January showing the closing balances for each account
        
3. Extract a trial balance. 

4. Prepare an Income statement for the month and Balance sheet as at month-end. Briefly explain the difference between an Income statement and Balance sheet.     

5. Who are the users interested in the financial information provided by Johan Enterprise and what possible use can they get from such information?

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