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Final Project ACC406
Account (AA101)
Kolej Poly-Tech MARA BANGI
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FACULTY OF BUSINESS AND MANAGEMENT (FBM)
ACC406 – INTERMEDIATE FINANCIAL ACCOUNTING AND REPORTING
FINAL PROJECT
“ACCOUNTING SIMULATION”
PREPARED FOR:
Ms Nuridayu Yunus
PREPARED BY:
BA K4 1E
MUHAMMAD ARIF DANIAL BIN
MOHD SUHAIMI
2019854014
ALDRIN JOEL TONY 2019422834
INTAN NURNAJIHA BINTI JEFERI 2019291302
NUR AZLYNA BINTI SAAD 2019256254
ACKNOWLEDGEMENT
First of all, thanks to God because given my friends and I to complete this task just in time. Even we had faced with a lot of difficulties along to complete this task, my group still manages to complete it and we so glad about it.
The completion of this group assignment could not have been possible without the participation and assistance from the lecturer and also each and every one of us in our group. This project is a result of 4 people.
Then thanks to my account lecturer, Miss Nuridayu binti Yunus for being such good guider for us while doing this task. She had given us appropriate example and knowledge in order to make us understand more about accounting. She also makes sure we understand everything she told and explanation before we begin to start this group work.
Next, would be each and every one of us who contribute to complete this group assignment. With their commitment given in this project, we manage to complete this final project within the time.
1. INTRODUCTION
According to Financial Accounting for Non-Accounting Students 5th Edition (Fatimah Abd Rauf, Amla Abu and Radziah Mahmud), sole proprietorship referred to a business owned and run by one individual with no legal distinction between owner and the business. In Malaysia, sole proprietorship registered under the Registration of Business Act 1956, which is under th e jurisdiction of Companies Commission of Malaysia (CCM) under the Domestic Trade and Consumers Affairs Ministry.
As the sole proprietor is not a legal entity, the owner is entitled to all profits made from the business. However, the owner’s liability is unlimited, not just when the business is having financial difficulty, but also when business fails and faces bankruptcy. There are difficulties concerning to the availability of accounting information as there is no obligation for sole proprietorship businesses to submit audited accounting reports to CCM every year. Therefore, most owners of sole proprietorships tend to neglect the preparation of proper accounting records. Some owners also exaggerate or underestimate the business’s financial position for their own purposes. So, it becomes a tedious process to access the sole proprietor’s true financial stability when, for instance, the owner wishes to apply for a bank loan.
In accounting process, various details and information about the business transactions of the organization must be collected. The obtained information will be recorded and then organize to come up with a proper report. In this topic, we will learn the accounting process which starting with identifying and analyzing business transactions, then maintaining the records of transactions in a journal, then posting a transaction to a ledger, and continue with the trial balance before we can prepare the financial statements.
2. ORGANIZATION BACKGROUND
Name of company : JAIA Tools Enterprise Date commencement : 01/01/ Nature of business : Hardware Retailer Capital contributed : RM500,000. Owned by : Intan Azlyna Binti Aldrin Danial Address : No. 7, Jalan Temoleh P8/7, Presint 8, 62000 Putrajaya, Wilayah Persekutuan Putrajaya. Telephone num : 012-778 5880
JAIA Tools Enterprise is a retailer selling hardware items as its product to a diversity of range of customers. It used approaches to promote the business through establishing relationships with people in the community. There are a number of selections of hardware items offered in this business. Products available are hardware tools like hammer and nails, electrical items and accessories like lighting switches and light bulbs, construction items, Lacoste brands. Like other organizations, JAIA Tools Enterprise also uses marketing strategy in order to acquire its customers. It use few ways in order to approach the customer. One method is to hold inventory, which buy products in bulk, unpack them, and sell them to customers to generate sales. Our business method are more to face-to-face interactions during selling and we offer discounts to promotional items to increase sales to to reduce hold inventory. Usually we have our regular customers where they will just order the item through calls and we will deliver it to them.
4. ACCOUNTING TRANSACTIONS
Business transactions comprises of five categories of account which is assets, owner’s equity, liability, revenues and expenses. The basic accounting equation of Assets = Capital + Liabilit ies forms the basis of the whole double entry bookkeeping system. Every transaction will have double effects on the accounting equation.
The accounting transactions as per below:
Date Effect Action BOPE
1/1/
Increase in Asset Debit Cash
General Journal
Increase in Owner’s Equity Credit Capital Increase in Asset Debit Bank Decrease in Asset Credit Cash
2/1/
Increase in Asset Debit Office Equipment Increase in Owner’s General Journal Equity
Credit Capital
3/1/
Increase in Asset Debi t Purchases Purchase Journal Increase in Liability
Credit A/C Payable - Marry Kim
4/1/
Increase in Asset Debit A/C Receivable - Mutiara Batrisya Sales Journal Decrease in Asset Credit Sales
5/1/
Increase in Expenses Debit Carriage Outwards Decrease in Asset Credit Cash General Journal
7/1/
Increase in Asset Debit Purchases Purchase Journal Increase in Liability Credit A/C Payable - Syafiq Enterprise
9/1/
Increase in Asset Debit A/C Receivable - Tantan Enterprise Sales Journal Increase in Asset Credit Sales
10/1/
Decrease in Liability Debit A/C Payable - Syafiq Enterprise Return Outwards
Decrease in Asset Credit Return Outwards Journal
11/1/
Increase in Asset Debit Cash Cash Payment Decrease in Asset Journal
Credit A/C Receivable - Mutiara Batrisya
12/1/
Increase in Asset Debit Drawing Increase in Owner’s General Journal Equity Credit Purchases
15/1/
Increase in Asset Debit Return Inwards Return Inwards
Decrease in Asset Credit A/C Receivable – Journal Tantan Enterprise
16/1/
Increase in Asset Debit Cash Sales Journal Increase in Revenue Credit Sales
19/1/
Increase in Asset Debit Purchases Cash Payment
Decrease in Asset Credit Cash Journal
21/1/
Decrease in Asset
Debit A/C Payable – Marry Kim Cash Receipt Increase in Asset Credit Bank Journal
22/1/
Decrease in Asset Debit Drawing Decrease in Owner’s General Journal Equity
Credit Cash
23/1/
Decrease in Asset Debit Rent General Journal Increase in Expenses Credit Cash
5. SPECIALIZED JOURNAL
Date Accounts Folio Debit (RM)
Credit
OFFICE EQUIPMENT A/C
DATE PARTICULAR RM DATE PARTICULAR RM
Jan- 02 Capital 5,000 Jan- 31 Balance c/d 5,000. 5,000 5,000. Feb- 01 Balance b/d 5,000. PURCHASES A/C DATE PARTICULAR RM DATE PARTICULAR RM Jan- 03 Marry Kim 419,700 Jan- 12 Drawing 3,598. Jan-
Syafiq Enterprise 35,700. Jan- 19 Cash 6,000. Jan-27 Bank 58,000 Jan-31 Balance c/d 515,802. 519,400 519,400. Feb-01 Balance b/d 515,802. MARRY KIM A/C DATE PARTICULAR RM DATE PARTICULAR RM Jan-21 Bank 10,000 Jan-03 Purchases 419,700. Balance c/d 409,700. 419,700 419,700. Feb-01 Balance b/d 409,700. MUTIARA BATRISYA A/C DATE PARTICULAR RM DATE PARTICULAR RM Jan-04 Sales 7,100 Jan-11 Cash 7,100.
SALES A/C DATE PARTICULAR RM DATE PARTICULAR RM Jan-
Mutiara Batrisya 7,100. Jan-
Tantan Enterprise 19,900. Jan- 31 Balance c/d 45,930 Jan- 16 Cash 18,930. 45,930 45,930. Feb- 01 Balance b/d 45,930. CARRIAGE OUTWARDS A/C DATE PARTICULAR RM DATE PARTICULAR RM Jan- 04 Cash 200 Jan- 31 Balance c/d 200. 200 200. Feb-01 Balance b/d 200. SYAFIQ ENTERPRISE A/C DATE PARTICULAR RM DATE PARTICULAR RM
Jan- 10
Return Outwards 2,950 Jan- 07 Purchases 35,700. Jan-31 Bank 10,000. Balance c/d 22,750. 35,700 35,700. Feb- 01 Balance b/d 22,750. TANTAN ENTERPRISE A/C DATE PARTICULAR RM DATE PARTICULAR RM Jan-09 Sales 19,900 Jan-15 Return inwards 1,990. Jan- 26 Cash 900. Jan-31 Balance c/d 17,010. 19,900 19,900. Feb-01 Balance b/d 17,010.
Return Outwards 2,
DATE PARTICULAR RM DATE PARTICULAR RM
Jan- 31 Balance c/d 2,950 Jan- 10
Syafiq Enterprise 2,950. 2,950 2,950. Feb-01 Balance b/d 2,950.
Drawing 4,
DATE PARTICULAR RM DATE PARTICULAR RM
Jan- 12 Purchases 3,598. Jan-22 Cash 500 Jan-31 Balance c/d 4,098. 4,098 4,098. Feb-01 Balance b/d 4,098.
Return Inwards 1,
DATE PARTICULAR RM DATE PARTICULAR RM
Jan-
Tantan Enterprise 1,990 Jan-31 Balance c/d 1,990. 1,990 1,990. Feb-01 Balance b/d 1,990.
Rent 2,
DATE PARTICULAR RM DATE PARTICULAR RM
Jan-23 Cash 2,000 Jan-31 Balance c/d 2,000. 2,000 2,000. Feb- 01 Balance b/d 2,000.
Service Revenue
7. TRIAL BALANCE
Particular
Debit Credit
Tantan Enterprise 17,
- 1/1/ (RM)
- Debit Cash GL
- Credit Capital GL
- Debit Bank GL
- 2/1/2019 Debit Office Equipment GL
- Credit Capital GL
- 3/1/2019 Debit Purchases PL
- Credit Marry Kim PL
- 4/1/2019 Debit Mutiara Batrisya SL
- Credit Sales SL
- 5/1/2019 Debit Carriage Outwards GL
- Credit Cash GL
- 7/1/2019 Debit Purchases PL
- Credit Syafiq Enterprise PL
- 9/1/2019 Debit Tantan Enterprise SL
- Credit Sales SL
- 10/1/2019 Debit Syafiq Enterprise ROL
- Credit Return Outwards ROL
- 11/1/2019 Debit Cash CPL
- Credit Mutiara Batrisya CPL
- 12/1/2019 Debit Drawing GL
- Credit Purchases GL
- 15/1/2019 Debit Return Inwards RIL
- Credit Tantan Enterprise RIL
- 16/1/2019 Debit Cash SL
- Credit Sales SL
- 19/1/2019 Debit Purchases CPL
- Credit Cash CPL
- 21/1/2019 Debit Marry Kim CRL 10,
- Credit Bank CRL 10,
- 22/1/2019 Debit Drawing GL
- Credit Cash GL
- 23/1/2019 Debit Rent GL
- Credit Cash GL
- 25/1/2019 Debit Cash GL
- Credit Revenue GL
- 26/1/2019 Debit Cash CPL
- Credit Tantan Enterprise CPL
- 27/1/2019 Debit Purchases PL
- Credit Bank PL
- 28/1/2019 Debit Cash GL
- Credit Commission Received GL
- 29/1/2019 Debit Salaries and Utility Expenses GL
- Credit Cash GL
- 30/1/2019 Debit Computer GL
- Credit Capital GL
- 31/1/2019 Debit Syafiq Enterprise CRL
- Credit Bank CRL - Trial Balance as at 31 January JAIA TOOLS ENTERPRISE
- Cash 64, RM RM
- Capital 505,
- Bank 372,
- Office Equipment 5,
- Purchases 515,
- Marry Kim 409,
- Sales 45,
- Carriage Outwards
- Syafiq Enterprise 22 ,
- Tantan Enterprise 17,
- Return Outwards 2,
- Drawing 4,
- Return Inwards 1,
- Rent 2,
- Service Revenue
- Commission Received
- Expanses 4, Salaries and Utilities
- Computer
- 988,280 988,
8. CONCLUSION
In business, the accounting process starts with recording of business transactions that are taken from several of source document, depends on type of the transactions. They are then classified and recorded in books of prime entry such as journals. Accounting transactions comprises of five categories of account, which is assets, owner’s equity, liability, revenues and expenses.
The basic accounting equation of Assets = Capital + Liabilities forms the basis of the whole double entry bookkeeping system. The equality of the accounting equation is always maintained regardless of the number of transactions recorded in the business. Every transaction will have double effects on the accounting equation. The effects will be an increase or decrease whether in assets, liabilities or capital.
After that, the total will be posted to the appropriate accounts in the ledgers. In financial accounting, journal is referring to a record of all the transactions of a business which occur within a specific time period. The business transactions are recorded chronologically in a journal each one with a short description. Specialized Journals are used by business which involved in numerous transactions each day.
A subsidiary ledger is a group of similar accounts whose combined balances equal the balance in a specific general ledger account. The combined balance of every account in this subsidiary ledger equals the balance of accounts receivable in the general ledger.
At the end of month, trial balance is prepared. The purpose is to check whether transactions have been recorded correctly in the books of accounts. Adjustment have to be made if there are errors. If all accounting entries are recorded correctly and all the ledger balances are accurately extracted, the total of all debit balances appearing in the trial balance must equal to the sum of all credit balances.
Final Project ACC406
Course: Account (AA101)
University: Kolej Poly-Tech MARA BANGI
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