Financial Accounting Assignment help




Financial accountancy (or financial accounting) is the field of accountancy concerned with the preparation of financial statements for decision makers, such as stockholders, suppliers, banks, employees, government agencies, owners, and other stakeholders. Financial capital maintenance can be measured in either nominal monetary units or units of constant purchasing power. The fundamental need for financial accounting is to reduce principal-agent problem by measuring and monitoring agents' performance and reporting the results to interested users. Financial accountancy is used to prepare accounting information for people outside the organization or not involved in the day to day running of the company. Management accounting provides accounting information to help managers make decisions to manage the business.

In short, Financial Accounting is the process of summarizing financial data taken from an organization's accounting records and publishing in the form of annual (or more frequent) reports for the benefit of people outside the organization.

Basic accounting concepts

Financial accountants produce financial statements based on Generally Accepted Accounting Principles of a respective country. In particular cases financial statements must be prepared according to the International Financial Reporting Standards

Financial accounting serves following purposes:

  • producing general purpose financial statements
  • provision of information used by management of a business entity for decision making, planning and performance evaluation
  • for meeting regulatory requirements

Accounting Statements:

Accounting system involves the formal records and original source data. A particular accounting system is to be maintained depending on the regulatory requirements of each kind of company. For example, an insurance company will have different accounting procedures from a bank. Accounting system is the mechanism in a company that generates and interprets financial information. The accounting system comprises all the machines and people that are there involved in accounting information formulation.

In accounting system, all the information relating to accounting is communicated by financial statements and purpose of financial statements is –

1. To report about the financial position of any entity. For example; a company, a not for profit organization, a firm, etc.

2. To show the results of the performance of an entity over a particular period of time normally over an accounting period that is basically from 1st of April to 31st of May.

The Main Financial Accounting Statements:

Financial accounting statements are there to show results of the financial performance of a business over a particular period of time and at a particular period of time and to give a detailed analysis for the result. There are 3 financial statements in particular:

1) The profit and loss account or income statement over a period of time.

2) A balance sheet at the end of the financial year.

3) A cash flow statement for a particular period.

Introduction to business math problems :

Business mathematics is mathematics used by commercial enterprises to record and manage business operations. Commercial organizations use mathematics in accounting, inventory management, marketing, sales forecasting, and financial analysis. The Main categories in business math are,

  • Money math
  • Paying taxes
  • Interest
  • Investing
  • Saving
  • Profit and loss  and etc.,

In this article we will see few basic business math problems.

(Source: Wikipedia)

Example Business Math Problems:

Business math problems Example 1:

  A Computer Sales and services center sells pendrives for $ 30 and laptops for `$` 2500 each.  In June, total sales were $ 10720.  Customers bought 6 times as many pendrives as laptops. How many of each did the centre sell?

Solution:

Let L = number of laptops

Then 6L = number of pendrives. 


Selling price of each laptops (L)   = $ 2500

So, $ 2500L

Selling price of each pendrives (6L) = `$` 30

6L (`$` 30) = $ 180

Together, they sold for:  2500L + 180L = 2680L dollars.

But we know that the total sales were `$` 10720

Hence,

2680L = 10720

          L = 10720/2680

              l= 4, 6L = 6(4) = 24


Therefore, they sold:  4 laptops and 24 pendrives.

Business math problems Example 2:

            An invoice dated July 15 for products Sara bought added up to $ 750. The terms were 3/10, n/60, f.o.b. shipping point. When the goods arrived, she paid shipment amounting to `$` 5.50. On July 20 she returned goods billed at `$` 22, and received credit therefore. Sara paid the bill on July 24. Find the amount of her check?

Solution:


Sara paid shipment in cash.

The shipment bill is outside of the invoice of `$` 750.

She returned goods worth `$` 22, so

The balance payable = $ 750 - $ 22

                                = $ 728

Sara paid on July 24 (within 10 days), so she gets a 3% discount ( as  3/10, n/60 shipping point)

                 Sara pay = 728 - (728* 3/100 )

                                = `$` 706.6

Additional Example Problems for Business Math :

Business math problems Example 3:

  John purchased a car by obtaining a simple interest loan. The car costs `$` 120000, and the interest rate on the loan is 8%. If the loan is to be paid back in monthly installments over 2 years, what will be the,

    1. The interest amount paid over the 2 years,

    2. The total amount to be paid back,

    3. The monthly payment amount.

Solution:

Given,

Principal = P= `$` 120000

Interest rate = R= 8% = 8/100 = 0.08

Time = T = 2 years

By formula,

Simple interest = P*R*T

1. The interest amount paid over the 2 years,

              I= 120000 * 0.08 * 2

                = $ 19200

 2. The total amount to be paid back,

               Total payment = Principal +interest

                                     = $ 120000 +$ 19200

                                      = $ 139200

3. The monthly payment amount.

                    = Total payment / payment time in months

                    = `139200 / (2 * 12)`    ( 1 year = 12 months)

                    = $ 5800 per month

 


Submit us an Assignment:

For Demo Class Click here
Read more