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ASSIGNMENT BRIEF

Programme: BTEC Higher National Diploma (HND)

Unit Number and Title: Financial Accounting
Unit Level: 4
Credit Value 15
Unit Number 10
Unit Code A/508/0496
Unit Lecturer: Khurram Riaz
Lecturer’s Email k.riaz@londonchurchillcollege.ac.uk
Programme Leader: Click or tap here to enter text.
Email Click or tap here to enter text.
Personal Tutor: Sadia Ali
Personal Tutor’s Email: sadia.ali@londonchurchillcollege.ac.uk

Key Dates

Issue date: 23.04.2018

Submission date: 25.06.2018
Result Published Date: 4 weeks after submission (Feedback is available after 3 weeks)

Introduction

Balancing the books is at the heart of all business management. The overall aim of this unit is to introduce
students to essential financial accounting principles and techniques 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.

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,
LO3& LO4 (Task 1). This should be written in a concise, formal business style using single spacing and font

BTEC Higher National Diploma (HND)/Unit 10: Financial Accounting/April 2018 Page 1

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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 exceeding the total word limit.

Specification of Assessment

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.)

Case 1
The following are the transactions of Kristine’s business during her first month of trading.
(a) Kristine starts a business and pays in £5,000 as capital
(b) The business buys a car for £1,000 cash
(c) They buy goods for resale for £500 cash
(d) They buy more goods for resale for £600 on credit from Mr A
(e) They pay rent of £200 cash
(f) They sell half the goods for £800 cash
(g) They sell the remaining goods on credit for £900 to Mrs X
(h) They pay £400 cash on account of the amount owing to Mr A
(i) They receive £500 from Mrs X
(j) Kristine withdraws £100 cash from the business

Part 1.
Record each transaction in t-accounts and balance off the accounts in double entry system.
Part 2.
Prepare a Trial Balance

P1: Apply the double entry book-keeping system of debits and credits. Record sales and purchases
transactions in a general ledger from Case 1 part 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 to financial accounting.]

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P2:Produce a trial balance applying the use of the balance off rule to complete the ledger from Case 1
part 2

M1: Analyse sales and purchase transactions to compile a trial balance using double entry book- keeping
appropriately and effectively from Case 1 part 1 & 2

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 1 part 1 & 2

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.]

Case 2

Rimel has a year end of 31 December each year.

On 1 April 2002 he purchases a car for £12,000. The car is expected to last for 5 years and to have a
scrap value at the end of 5 years of £2,000.

You are required to calculate the depreciation charge for each of the first three accounting periods,
and to show extracts from the Statement of Financial Position and Statement of Profit or Loss for each
of the three accounting periods.

P3: Prepare final accounts from given trial balancefigures adjusting for accruals, depreciation and
prepayments from Case 2

P4: Produce final accounts for a range of examplesthat include sole-traders, partnerships or limited
companies.

M2: Analyse profit and loss accounts, balance sheet and cash flow statements appropriate for the given
examples from Case 2

D2: Apply appropriate and accurate calculations for the constructing of the final accounts in Case 2.

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 limited
companies). Principles and conventions: Understanding accounting rules and principles.
Understanding the concepts and conventions of consistency and material disclosure.]

BTEC Higher National Diploma (HND)/Unit 10: Financial Accounting/April 2018 Page 3

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Case 3
At 31 December 2007, the balance on the cash account was £11,820 (DR), but the balance
appearing on the bank statement was £15,000 (CR). The reasons for the difference were
as follows:
(1) Bank charges of £20
(2) A payment of £1,200 had been entered in the cash account as £2,100
(3) A cheque for £200 had been dishonoured
(4) There were un-presented cheques totalling £6,500
(5) Rent of £4,000 had not yet appeared on the bank statement

Calculate the correct balance on the cash account and prepare a bank reconciliation statement.

P5: Apply the bank reconciliation process to prepare a number of bank reconciliations from Case 3

M3: Apply the reconciliation process demonstrating the knowledge 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 3 and explain each process.

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 reconciliation?

The process of reconciliation:

Ensure that all entries relate to a particular period is correctly entered in the ledger system to support the
preparation of the profit and loss account and balance sheet. Use the tools and techniques to check
general accounts and balance sheets against the liquid holdings and cash reserves.

Variances:
Identifying variances through a bank reconciliation
Dealing with negative and positive variances
When is a negative variance a positive and vice versa?
Ensuring the same entry for every debit and credit entry and the balance for each account is calculated
and entered correctly.]

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Case 4

Biruta has prepared the following trial balance.

Dr Cr
Motor Van, at cost 5500
Inventory 6230
Receivables Ledger Control 19167
Cash at bank 218
Petty Cash 50
Payables ledger control 13166
account
Prepayment 490
Accruals 70
Motor Van- Accumulated 2000
depreciation
Sales 93870
Purchases 76182
Rent Expenses 1200
Wages expenses 12500
Electricity 516
Telephone 230
Accountancy expense 500
Van expense 280
Depreciation expense 1000
Capital 10000

124063 119106

The trial balance does not balance, and Biruta realises that this means that there must be errors in the
bookkeeping.
On investigation, the following errors are discovered:

(a) A transposition error was made when posting a sales day book total of £8,132. The correct figure was
entered in the receivables ledger control account, but it was posted to the sales account as £1,832
(b) The balance on the electricity account was incorrectly recorded and should read £615
(c) One cash payment for electricity of £200 had been recorded throughout as £20
(d) When accounting for the telephone accrual of £70 at the year end, a single entry had been made. It
was the expense account entry that had been missed out.
(e) A mistake had been made when casting the purchases account. The total should have been
£77,356

You are required to open a suspense account. For each error make any relevant entries in the
suspense account.

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P6: Explain the process taken to reconcile control accounts and clear suspense accounts 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 from Case 4.
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.]

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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: Wiley Publishing.
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
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

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Assignment Submission Instructions

To submit Assignment, please follow the instructions below -

1. Go to the following website: http://www.turnitinuk.com/
2. Start by clicking on the class name you would like to submit to after logging in to Turnitin

3. You will see a two links, one for your Draft Submission and one for the Final Submission. Click on
the Submit button to the right of the assignment you wish to submit. Please remember that you
will only be able to submit to each folder once.

4. Select single file upload from the Submit: pull down menu

5. Enter a title for the submission

6. Once the requirements for single file upload have been reviewed, students have a choice to
upload a file from:
the computer
Drop box
or Google Drive
Click one of the submission buttons and then select the file you would like to upload

7. Click Upload to upload the file

8. Review the preview panel. Click the Confirm button to upload the file to the assignment

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If you still have any questions or need any help, please contact with your Personal Tutor.

Assignment Submission Limit

Learners must submit their assignments via Turnitin. Turnitin is an originality checking and plagiarism
prevention service that is used by the College to assess assignments.
The College has a cap on the number of times that an assignment can be submitted through Turnitin.
Students will now only be able to obtain one similarity report prior to their final submission.
Students wishing to generate a similarity report before their final submission should submit their
assignment in the Drafts Folder on Turnitin. Only one submission can be made to this folder and no
submissions to this folder will be assessed.

The Final assignment must be submitted in the Final Submission Folder or the Learner will be considered
absent for the submission, even if they have submitted in the Drafts Folder.
For the final submission, Learners must add the feedback front sheet to declare the authenticity of their
assignment.

Achievement of a pass grade

A pass grade is achieved by meeting all the requirements defined in the assessment criteria for each
individual unit.
Achievement of a merit or distinction grade
All the assessment criteria and merit grade descriptors need to be completed within a unit to achieve a
merit grade. All the assessment criteria and merit and distinction grade descriptors must be completed
within a unit to achieve a distinction grade.
Academic Misconduct
Academic Misconduct is an act of gaining an unfair academic advantage in relation to formal or informal
academic exercises. Examples of academic misconduct are- Cheating in an examination; Impersonation;
Fabrication; Collusion; Plagiarism; Submission of work produced by someone else.
The College consider all academic misconduct seriously. For reference, learners are recommended to read
the following documents and to consult with their Personal Tutors -
LCC Harvard Referencing Guide (Located in VLE)

Academic Discipline Policy (Located in VLE)

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Mitigating Circumstances
Mitigating circumstances can be defined as circumstances that are unexpected, significantly disruptive
and beyond the control of the student, which could not be reasonably predicted or accommodated by the
student and which affects student’s ability to meet assessment deadlines or impairs the performance of
the student in assessment.

If you wish to apply for mitigating circumstances, you can obtain the form from E-Learning, your personal
tutor or reception. The completed form must be accompanied by evidence such as a medical certificate in
the event of you being sick.

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. For further information please consider reading the
following policy-

Mitigating Circumstances Policy (Located in E-learning)

Referencing 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 of 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:
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.
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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.
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

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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 in-depth 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 walking 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-and-

spencer.co.uk/corporate/annual2003/ [accessed 4 June 2005].

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