ASSIGNMENT BRIEF

QUALIFICATION UNIT NUMBER AND TITLE

PEARSON BTEC HIGHER NATIONAL DIPLOMA IN BUSINESS (RQF) 10. FINANCIAL ACCOUNTING (LEVEL 4)
INTERNAL VERIFIER UNIT TUTOR
MUHAMMAD ALI IQBAL RAJA
DATE ISSUED SUBMISSION DATE RESUBMISSION DATE
TH TH ND
27 APR 2020 12 JUN 2020 22 JUN 2020

ASSIGNMENT TITLE FINANCIAL ACCOUNTING PRINCIPLES

LEARNING OUTCOME AND ASSESSMENT CRITERIA

PASS MERIT DISTINCTION
LO1 RECORD BUSINESS TRANSACTIONS USING DOUBLE ENTRY BOOK-KEEPING, AND BE ABLE
TO EXTRACT A TRIAL BALANCE
D1 RECORD CORRECTLY TRANSACTIONS
P1 APPLY THE DOUBLE ENTRY BOOK-
AND PRODUCE AN ACCURATE TRIAL
KEEPING SYSTEM OF DEBITS AND CREDITS.
M1 ANALYSE SALES AND PURCHASE BALANCE BY COMPLETING THE BALANCE OFF
RECORD SALES AND PURCHASES
TRANSACTIONS TO COMPILE A TRIAL OF LEDGER ACCOUNTS, CHECKING THAT
TRANSACTIONS IN A GENERAL LEDGER.
BALANCE USING DOUBLE ENTRY BOOK- EACH TRANSACTION IS RECORDED IN LINE
P2 PRODUCE A TRIAL BALANCE APPLYING WITH ACCEPTED ACCOUNTING PRINCIPLES.
KEEPING APPROPRIATELY AND EFFECTIVELY.
THE USE OF THE BALANCE OFF RULE TO
COMPLETE THE LEDGER.
LO2 PREPARE FINAL ACCOUNTS FOR SOLE-TRADERS, PARTNERSHIPS AND LIMITED
COMPANIES IN ACCORDANCE WITH APPROPRIATE PRINCIPLES, CONVENTIONS AND
STANDARDS
P3 PREPARE FINAL ACCOUNTS FROM GIVEN
TRIAL BALANCE FIGURES ADJUSTING FOR D2 APPLY APPROPRIATE AND ACCURATE
ACCRUALS, DEPRECIATION AND M2 ANALYSE PROFIT AND LOSS ACCOUNTS, CALCULATIONS FOR THE CONSTRUCTING OF
PREPAYMENTS. BALANCE SHEET AND CASH FLOW THE FINAL ACCOUNTS.
P4 PRODUCE FINAL ACCOUNTS FOR A STATEMENTS APPROPRIATE FOR THE GIVEN
RANGE OF EXAMPLES THAT INCLUDE SOLE- EXAMPLES.
TRADERS, PARTNERSHIPS OR LIMITED
COMPANIES.
LO3 PERFORM BANK RECONCILIATIONS TO ENSURE COMPANY AND BANK RECORDS ARE
CORRECT D3 PREPARE ACCURATE BANK
M3 APPLY THE RECONCILIATION PROCESS RECONCILIATIONS THAT APPLY APPROPRIATE
P5 APPLY THE BANK RECONCILIATION TOOLS AND TECHNIQUES TO CHECK GENERAL
DEMONSTRATING THE USE OF DEPOSIT IN
PROCESS TO PREPARE A NUMBER OF BANK
TRANSIT, OUTSTANDING CHECKS AND NOT ACCOUNTS AND BALANCE SHEETS.
RECONCILIATIONS.
SUFFICIENT FUNDS (NSF) CHECK.
LO4 RECONCILE CONTROL ACCOUNTS AND SHIFT RECORDED TRANSACTIONS FROM THE
SUSPENSE ACCOUNTS TO THE RIGHT ACCOUNTS
D4 PRODUCE ACCURATE ACCOUNTS THAT
P6 EXPLAIN THE PROCESS TAKEN TO
M4 DEMONSTRATE UNDERSTANDING OF HAVE BEEN RECONCILED APPLYING THE
RECONCILE CONTROL ACCOUNTS AND CLEAR
THE DIFFERENT TYPES OF ACCOUNTS AND APPROPRIATE METHODS.
SUSPENSE ACCOUNTS USING GIVEN
HOW AND WHY THEY ARE RECONCILED.
ACCOUNT EXAMPLES.

SUBMISSION FORMAT
THE SUBMISSION IS IN THE FORM OF AN ESSAY; A COMPLETE PORTFOLIO OF FINANCIAL STATEMENTS; AND 3 REPORTS.
THE PORTFOLIO OF INCOME STATEMENTS SHOULD DEMONSTRATE CALCULATIONS USING DIFFERENT COSTING METHODS .

THE REPORT SHOULD BE WRITTEN IN A CONCISE, FORMAL BUSINESS STYLE USING SINGLE SPACING AND FONT STYLE CALIBRI AND SIZE 11.
YOU ARE REQUIRED TO MAKE USE OF 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. THE RECOMMENDED WORD LIMIT IS 3000 WORDS.

THE REPORT SHOULD BE WRITTEN IN A CONCISE, FORMAL BUSINESS STYLE USING SINGLE SPACING AND FONT STYLE CALIBRI AND SIZE 11.
YOU ARE REQUIRED TO MAKE USE OF 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. THE RECOMMENDED WORD LIMIT IS 1000 WORDS.

ASSIGNMENT SCENARIO AND GUIDANCE

SCENARIO 1

Mr. John has started a new business and has hired you to maintain his business transactions using double-entry
st
bookkeeping system. Draw a trial balance for the month ending 31 January, based on the following transactions:
th
Jan 10 Mr. John started business with £180,000 deposited in
bank
th
11 He bought plant & equipment from ModArt for £25,000
th
12 He purchased goods, paying cheque 15,000
th
13 He purchased goods from B. Sen & Co. for £12,000
th
14 Alex paid rent from bank account £5000
th
16 Cash sales £15,000
th
17 He purchased stationary for £1000 from Nok Stationary
Mart
th
18 Sold goods to Cris for £10,000
th
19 He bought machinery for £6,000 and payment made by
cheque
th
20 Goods returned by Cris for £2,000
st
21 Payment to B. Sen & Co. by cash 5,000
nd
22 Withdrew from bank for personal use £3,000
rd
23 Interest paid through cheque £2,000
th
24 Withdrew from bank for office expenses £10,000
th
26 Cash received from Cris £5,000
th
27 Paid electricity bill for £100 in cash
th
29 Cash sales for £6,000
th
30 Commission received by cheque £5,000
SCENARIO 2A

You work as the accountant for a client named Mary and have just taken out the trial balance as at
30 September 2011:

£ DR £ CR
Purchases 1,520,000
Capital as at 01 10 10 402,000
Long-term loan 60,000
Sales 2,235,000
Marketing expenses 24,000
Inventory as at 01 10 10 74,000
Accounts receivable 84,000
Provision for doubtful debts 1,000
Accounts payable 61,000
Business rates 43,000
Insurances 49,000
Energy costs 57,000
Motor expenses 39,000
Wages and salaries 298,000
Loan interest 3,000
Buildings at cost 500,000
Vehicles at cost 70,000
Vehicle depreciation 01 10 10 30,000
Bank 2,000
Cash 1,000
Drawings 25,000
------------ ------------
2,789,000 2,789,000
======= =======
Notes at 30 September 2011:
 Inventory was valued at £77,000.
 Marketing expenses prepaid amounted to £3,000.
 Salaries owing amounted to £8,000.
 Energy costs owing amounted to £4,000.
 The accountant has reviewed the accounts receivable (debtors) outstanding and advises Mary to
write off £4,000.
 After writing off the bad debt it is suggested that the provision for doubtful debts should be
increased to £3,000.
 The vehicles are to be depreciated by 20% on cost.
SCENARIO 2B
st
You work as an accountant for Verso Ltd and trial balance as at 31 December, 2018 is as follows :

£ £
Sales 2860,000
Purchase 1200,000
Stock 125,000
Salaries and wages 140,000
Advertising 220,000
Insurance 7,000
Rates 16,000
General expense 22,000
Light, heat, water 5,000
Communication cost 16,000
Professional fee 12,000
Audit fee 6,000
Interest paid 15,000
Provision for doubtful debt 10,000
Accounts payable 220,000
Accounts receivable 376,000
Freehold building 2268,000
Equipment 780,000
Depreciation of equipment 468,000
Ordinary share capital 1 150,000
Profit/loss account balance 1298,000
Long term loan 450,000
Dividend paid 180,000
Bank 68,000

st
Notes as at 31 December 2018:
 Wages owing amounted to £12000
 Advertising owing amounted to £18000
 Communication cost of £2000 has been paid in advance
 Business rates £4000 have been paid in advance
 Inventory was valued at £135000
 Equipment was depreciated 15% on cost
 Doubtful debt provision increased by £4000
 Directors which to provide taxation £140,000
SCENARIO 3

BANK RECONCILIATION
st
A company commenced business on 1 March making one product only, the cost card of which is as follows:
The balance as per the cash book and bank record did not balance.
CASH BOOK
2016 £ 2016 £
st th
December 1 Balance b/d 160 December 8 Venus 115
th st
December 12 Tyra 80 December 21 Frank 35
rd st
December 23 Mc cathy 130 December 31 Barnes 25
st st
December 31 Aston 72 December 31 Balance c/d 267
442 442

BANK STATEMENT
2016 Withdrawal - £ Deposit - £ Balance - £
st
December 1 Balance b/d 160
December Venus 115 45
th
11
December Deposit 80 125
th
14
December Deposit 130 255
th
29
December Frank 35 220
rd
23
December A Parkinson 24 244
th
30
December Bank Charges 40 204
st
31
SCENARIO 4 (SUSPENSE ACCOUNT CONCEPT)

The following is a trial balance which has been incorrectly drawn up:
ST
TRAIL BALANCE – 31 JANUARY 2016 £ £
st
Capital 1 February 2016 5500
Drawings 2800
st
Stock 1 February 2016 2597
Debtors 2130
Furniture and Fittings 1750
Cash in hand 1020
Creditors 2735
Sales 7430
Return inwards 85
Discount received 46
Business expense 950
Purchases 4380
16466 14977

In addition to the mistakes evident above in making the trail balance, the following errors were also discovered:
 A payment of £75 made to a creditor had not been posted from cashbook into purchase ledger.
 A cheque of £56 received from a customer has been correctly entered in cashbook but posted to
customers account as £50.
 The purchase of fittings £120 had been included in purchase account.
 The total of discount allowed column in cashbook of £38 had not been posted into general ledger.
 A page of the sales daybook was correctly totaled as £564 but carried forward as £456.
 Cash sales of £500 were not recorded anywhere In the books
 Light and heat bill of £100 was wrongly recorded as a business expense.
SCENARIO 5A (CONTROL ACCOUNTS CONCEPT)

You work as an accountant for a company, Rock Ltd and have to write up control accounts for the month of
February.
£
1 February purchase ledger control credit balance 26,100
1 February sales ledger control debit balance 51,400
Total transaction in the month of February:
Bad debts written off 420
Credit purchases 37,590
Cash purchases 5,200
Return outwards 510
Return inwards 1,480
Cheque paid to creditors 24,270
Cheque received from debtors 47,360
Contra between S/L and P/L 800
Dishonored cheque 140
Credit sales 74,900
Cash sales 9,250
Discount allowed 1,840
Discount received 960
Cheque received from supplier 460

SCENARIO 5B (CONTROL ACCOUNTS CONCEPT)

The following relates to the ledger of a small company:

£
Total Debtors (Accounts Receivable) On 1 May 2012 74,800
Transactions In May:
Cash Sales 3,150
Credit Sales 86,600
Discounts Allowed 1,400
Discounts Received 900
Returns Inwards 1,300
Returns Outwards 1,800
Contras (Set Offs) 1,700
Bad Debts Written Off In May 400
Receipts From Debtors 76,400
Payments To Creditors 44,000
TASK 1 – SCENARIO 1 (LO1: P1, P2) (M1 AND D1)
P1) Explain double entry book keeping of debits and credits; also explain regulations for recording of sales,
purchase, receipts and returns transactions according to accounting standards.

P2) Explain balance off rule and apply on given data to produce a trial balance.

TO ACHIEVE M1, ANALYSE SALES AND PURCHASES TRANSACTIONS TO COMPILE A TRIAL BALANCE USING DOUBLE ENTRY BOOK -KEEPING
APPROPRIATE AND EFFECTIVELY

TO ACHIEVE D1, USE APPROPRIATE ACCOUNTING STANDARDS ACCURATELY WHILE RECORDING TRANSACTIONS AND PRODUCING A TRIAL
BALANCE, AND BEST USE OF BALANCE OFF RULE OF LEDGER ACCOUNTS .
TASK 2 – SCENARIO 2A 2B AND 2C (LO2: P3, P4) (M2 AND D2)

P3) Prepare financial statements of Mary.

Study Verso Ltd information:

P4) Prepare Verso Ltds financial statements.

TO ACHIEVE M2, DEFINE AND EXPLAIN THE PURPOSE OF INCOME STATEMENT, BALANCE SHEET AND CASH FLOW STATEMENT. ANALYSE
THESE IN THE ABOVE EXAMPLES AND HOW THEY VARY DEPENDING UPON THE TYPE OF BUSINESS ORGANISATION .

TO ACHIEVE D2, APPLY APPROPRIATE AND ACCURATE CALCULATIONS FOR THE CONSTRUCTING OF THE FINAL ACCOUNTS .

TASK 3 – SCENARIO 3 (LO3: P5) (M3 AND D3)

P5) Reconcile the cashbook balance with the balance as per bank statements.

TO ACHIEVE M3, EXPLAIN THE TERMS UN-PRESENTED CHEQUE, BANK LODGMENTS NOT YET CREDITED, STANDING ORDER, DIRECT DEBITS,
AND DISHONOURED CHEQUES. APPLY THE RECONCILIATION PROCESS DEMONSTRATING THE USE OF THESE .

D3 PREPARE ACCURATE BANK RECONCILIATIONS THAT APPLY APPROPRIATE TOOLS AND TECHNIQUES TO CHECK GENERAL ACCOUNTS AND
BALANCE SHEETS

TASK 4 – SCENARIO 4 (LO4: P6) (M4 AND D4)

Based on Scenario 4:
P6) Show the trial balance as it would appear after all the errors had been corrected, you are required to show all
workings.

Based on Scenario 5A:

P6) Prepare the sales ledger and purchase ledger control account

Based on Scenario 5B:

P6) Write up the sales ledger control account as at 2012.

TO ACHIEVE M4 COMPLETE THE FOLLOWING:

WHAT ARE CONTROL ACCOUNTS AND WHY ARE THEY USED?
IDENTIFY AND BRIEFLY EXPLAIN ERRORS NOT IDENTIFIED BY THE TRIAL BALANCE. EXPLAIN THE PURPOSE OF
SUSPENSE ACCOUNTS.
DEMONSTRATE UNDERSTANDING OF THE DIFFERENT TYPES OF ACCOUNTS AND HOW AND WHY THEY ARE
RECONCILED.

TO ACHIEVE D4 PRODUCE ACCURATE ACCOUNTS THAT HAVE BEEN RECONCILED APPLYING THE APPROPRIATE
METHODS FOR SCENARIO 4, 5A AND 5B.

EVIDENCE CHECKLIST SUMMARY OF EVIDENCE REQUIRED BY STUDENT

TASK 1 Essay
TASK 2 Report
TASK 3 Report
TASK 4 Report