ASSIGNMENT BRIEF

QUALIFICATION UNIT NUMBER AND TITLE

PEARSON BTEC HND IN BUSINESS (RQF) 10. RECORDING FINANCIAL TRANSACTIONS (LEVEL 4)
INTERNAL VERIFIER UNIT TUTOR
DR ALI SALMAN
DATE ISSUED SUBMISSION DATE RESUBMISSION DATE
As per the planner 10 may 2024 10 MAY 2024

ASSIGNMENT TITLE RECORDING FINANCIAL TRANSACTIONS

Pass Merit Distinction

LO1 Record business transactions using double entry bookkeeping, books of
prime entry, journals and ledger accounts

P1 Record double entry bookkeeping M1 Analyse a range of business

transactions in a timely and accurate transactions using double entry, books D1 Conduct systematic gathering,
way. of prime entry, journals and ledgers in summarising and recording of business
order to provide accurate and timely transactions for accurate reporting of
P2 Apply a range of business accounting information. organisational efficiency and
transactions using double entry performance.
bookkeeping, books of prime entry,
journals and ledgers.

LO2 Prepare a trial balance for an organisation from data provided

P3 Using data provided, extract ledger M2 Interpret, identify and correct

balances into a trial balance for an accounting errors through the D2 Produce a trial balance that is
organisation to accurately record production of a trial balance to ensure timely, accurate and fully compliant for
transactions. accurate accounting records. an organisation to meet its objectives.

LO3 Perform bank reconciliations to ensure organisation and bank records are
correct

P4 Prepare a bank reconciliation M3 Appraise the bank reconciliation

statement from given data for an process identifying errors and D3 Producing bank reconciliations that
organisation. omissions from a bank statement and are timely, accurate and fully compliant
cashbook. for an organisation to meet its
objectives.

LO4 Perform control account reconciliations for accounts receivable and

accounts payable.
P5 Explain the role and differences M4 Evaluate the different types of
between control and suspense control accounts in the context of the D4 Critically evaluate the role and
accounts. double entry bookkeeping system. purpose of control and suspense
accounts in supporting effective
P6 Perform control account financial management in the
reconciliations for accounts receivable organisation.
and payable from given data.

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

TASKS

SCENARIO 1
Mr. Tom has started a new business and has hired you to maintain his business transactions using double-entry bookkeeping
system. Draw a trial balance for the month ending 31st January, based on the following transactions

10th Mr Tom started business with £180,000 deposited in bank

11th He bought fixtures and fittings from Delta ltd for £25,000

12th Tom purchased goods by cheque, 12,000

13th He purchased goods from B. Sen & Co. for £15,000

14th Tom paid rent from bank account £7000

15th Cash sales £17,000

16th He purchased stationary for £2000 from X.Stationary Mart

17th Tom sold goods to Cris for £12,000

 18th He bought machinery for £4,000 and payment by bank.

19th Goods returned by Cris for £4,000

20th Payment to B. Sen & Co. by cash 5,000

21th Withdrew from bank for personal use £3,000

22th Interest paid through cheque £2,000

23th Withdrew from bank for office expenses £10,000

24th Cash received from Cris £5,000

25th Tom paid electricity bill for £500 in cash

26th Cash sales for £6,000

27th 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 £2,000.
 Salaries owing amounted to £10,000.
 Energy costs owing amounted to £2,000.
 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 15% on cost

SCENARIO 2B

You work as an accountant for Verso Ltd and trial balance as at 31st 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

Notes as at 31st December 2018:

 Wages owing amounted to £10000
 Advertising owing amounted to £20000
 Communication cost of £4000 has been paid in advance
 Business rates £2000 have been paid in advance
 Inventory was valued at £135000
 Equipment was depreciated 10% on cost
 Doubtful debt provision increased by £4000
 Directors which to provide taxation £140,000

SCENARIO 3

BANK RECONCILIATION
A company commenced business on 1st 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 £

December 1st Balance b/d 160 December 8th Venus 115

December 12th Timmy 80 December 21st Frank 35

December 23rd Cathy 130 December 31st Barnes 25

December 31st Aston 72 December 31st Balance c/d 267

442 442

BANK STATEMENT
 2016 Withdrawal - £ Deposit - £ Balance - £
December 1st Balance b/d 160

December Venus 115 45

11th
December Deposit 80 125
14th
December Deposit 130 255
29th
December Frank 35 220
23rd
December A Parkinson 24 244
30th
December Bank Charges 40 204
31st

SCENARIO 4 (SUSPENSE ACCOUNT CONCEPT)

The following is a trial balance which has been incorrectly drawn up:

TRAIL BALANCE – 31ST JANUARY 2016 £ £

Capital 1st February 2016 5500

Drawings 2800
Stock 1st February 2016 2597
Debtors 2130
Furniture and Fittings 1750
Cash in hand 1020
Creditors 2735
Sales 7430
Return inwards 85
46
Discount received
950
Business expense
4380
Purchases 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

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
1,300
Returns Inwards
1,800
Returns Outwards 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 PURCHASE LEDGER CONTROL ACCOUNT

BASED ON SCENARIO 5B:

P6) WRITE UP THE SALES LEDGER CONTROL ACCOUNT.

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 THE STUDENT
TASK 1 Essay
TASK 2 Report
TASK 3 Report
TASK 4 Report