Accounting Learning Outcomes, Safety Hire Financials, Journal Entries, And Adjusting Entries

The phrase “accounting is all about numbers” is a common perception yet it as a broader meaning. Accounting is a process of communicating financial information to one department to the top management of the business organization. It cannot be said that accounting is all about numbers because it helps in identifying, measuring, recording, and communicating all the financial transactions of the business and helps in communication of the financial information to the management which helps in understanding the financial performance of the business organization. The accounting not only helps in the communication of the financial information but it provides the main basis for the management of the company to take various crucial and key decisions for the management of the company (Fauré, Cooren & Matte, 2019).

Such financial information must be communicated in the form of the reports where the management of the business organization can analyze such financial data effectively. A proper appreciation should be given to the accountants who process the financial information into reports which helps the users of the financial report in taking various key decisions. As per the above meaning, the four key elements of the accounting are identifying, recording, measuring, and communicating financial information in the form of financial reports. Therefore, it can be concluded that it is merely a rumor that accounting is just a game of numbers. Accounting in a diverse sense is a process of transfer of the financial information of the business organization from the accounting department to the management department (Galley & Heilmann, 2016).

Safety Hire
Income Statement
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Equipment Hire Income	170,000
Less: Expenses
Electricity Expenses	1800
Telephone expenses	7500
Wages	75000
Advertising expenses	30000
	114,300
Net Profit Before Interest & Tax	55,700

Safety Hire
Statement of Financial Position
as at 30th June 2019
	£	£
Non-Current Assets
Building	85000
Hire Equipment	180000
Land	75000	340000
Current Assets
Cash	45000
Trade receivables	63000	108000
Current Liabilities
Trade payables	40000	40000
NET CURRENT ASSETS		68,000
Total Assets		408,000
Non-Current Liabilities
Mortgage payable	130000
Loan Payable	50000	180000
Total Net Assets		228,000
Capital
Opening capital
Add: Profit for the year		228,000

Nicole Andreou
Journal Entries
Date (July 2018)	Particulars		Debit	Credit
1	Cash A/c	Dr.	$ 120,000.00
	To loan payable			$ 120,000.00
	for cash invested in the business
2	Rent expenses	Dr.	$ 1,800.00
	To Cash			$ 1,800.00
	for rent paid
3	Equipment	Dr.	$ 32,000.00
	To Loan payable			$ 32,000.00
	for equipment purchased via loan
4	Supplies A/c	Dr.	$ 8,400.00
	To cash A/c			$ 8,400.00
	for supplies purchased
6	Advertising expenses	Dr.	$ 890.00
	To cash			$ 890.00
	for advertisement expenses paid
16	Cash A/c	Dr.	$ 3,250.00
	Accounts receivable	Dr.	$ 620.00
	To sales			$ 3,870.00
	for sales made in cash as well as on the credit
20	Insurance A/c	Dr.	$ 480.00
	To bank A/c			$ 480.00
	for insurance expenses paid via bank transfer
23	Cash A/c	Dr.	$ 140.00
	To Accounts Receivable			$ 140.00
	for cash received from a customer on credit sales
28	Drawings a/c	Dr.	$ 560.00
	To cash A/c			$ 560.00
	for cash withdrawn for personal use
31	Cash A/c	Dr.	$ 3,680.00
	Accounts receivable	Dr.	$ 580.00
	To sales			$ 4,260.00
	for sales made in cash as well as on the credit
31	Telephone Expenses		$ 330.00
	To bank A/c			$ 330.00
	for telephone expenses paid via ETF
	Total		$ 172,730.00	$ 172,730.00

Ledger Accounts
Nicole Andreou Beauty Parlor
		CASH at bank A/C
Date	Particulars	Amount	Date	Particulars	Amount
2	To loan payable	120000	2	By rent	1800
16	To sales	3250	4	By supplies	8400
23	To accounts receivable	140	6	By advertising	890
	To sales	3680	20	By insurance	480
			28	By drawings	560
			31	By telephone expenses	330
			31	By balance c/d	114610
		127070			127070
		Accounts receivable
Date	Particulars	Amount	Date	Particulars	Amount
16	To sales	620	23	By cash A/c	140
	To sales	580	31	By balance c/d	1060
		1200			1200
		Supplies
Date	Particulars	Amount	Date	Particulars	Amount
4	To cash A/c	8400	31	By balance c/d	8400
		8400			8400
		Equipment
Date	Particulars	Amount	Date	Particulars	Amount
3	To loan payable	32000	31	By balance c/d	32000
		32000			32000
		LOAN
Date	Particulars	Amount	Date	Particulars	Amount
31	To balance c/d	152000	2	By cash A/c	120000
			3	By Equipment	32000
		152000			152000
		Nicole Drawings
Date	Particulars	Amount	Date	Particulars	Amount
28	To cash A/c	560	31	By balance c/d	560
		560			560
		Sales
Date	Particulars	Amount	Date	Particulars	Amount
31	To balance c/d	8130	16	By cash A/c	3250
			16	By accounts receivable	620
			31	By cash A/c	3680
			31	By accounts receivable	580
		8130			8130
		Rent
Date	Particulars	Amount	Date	Particulars	Amount
2	To cash A/c	1800	31	By balance c/d	1800
		1800			1800
		Insurance
Date	Particulars	Amount	Date	Particulars	Amount
20	To cash A/c	480	31	By balance c/d	480
		480			480
		Advertising
Date	Particulars	Amount	Date	Particulars	Amount
6	To cash A/c	890	31	By balance c/d	890
		890			890
		Telephone
Date	Particulars	Amount	Date	Particulars	Amount
31	To cash A/c	330	31	By balance c/d	330
		330			330

Trial Balance
Nicole Andreou
as at 31st July 2018
Account number	Account Name	Debit	Credit
100	Cash at Bank	114610.00
101	Supplies	8400.00
102	Account receivable	1060.00
103	Equipment	32000.00
200	Loan payable		152000.00
300	Capital		0.00
301	Drawings	560.00
400	Sales		8130.00
500	Rent	1800.00
501	Advertising expense	890.00
502	Insurance	480.00
503	Telephone	330.00

	Total	160130.00	160130.00

	Journal Entries
Date	Particulars		Debit	Credit
	Interest expense	Dr.	$ 480.00
	To interest payable			$ 480.00
	for interest expense recorded
	Insurance Expenses	Dr.	$ 820.00
	To prepaid insurance			$ 820.00
	for prepaid insurance used in the year
	Salaries expense (22023)	Dr.	$ 1,320.00
	To salaries payable			$ 1,320.00
	for computer purchased
	Unearned drycleaning revenue (2100/3)	Dr.	$ 700.00
	To dry cleaning revenue			$ 700.00
	for services incurred for the revenue already earned
	Supplies expense	Dr.	$ 1,650.00
	To prepaid supplies			$ 1,650.00
	for prepaid supplies used

	Total		$ 4,970.00	$ 4,970.00

Workings
Principal	$ 16,000.00
Rate	8%
Time	4.5	15th Feb to 30th June
Interest	$ 480.00
One year policy	660/12*4	$ 220.00
Three-year policy	2700/3/12*8	$ 600.00
Total insurance expense		$ 820.00

Opening supplies	$ 280.00
Add: purchases	$ 1,560.00
Less: closing	$ 190.00
Supplies expenses	$ 1,650.00

Elliot Painting services
Particulars	Adjusted trial balance	Income statement	Balance sheet
Account	Debit	Credit	Debit	Credit	Debit	Credit
Cash at Bank	$ 1,230.00				$ 1,230.00
Accounts Receivable	$ 75,600.00				$ 75,600.00
Prepaid Rent	$ 1,800.00				$ 1,800.00
Office Supplies	$ 8,320.00				$ 8,320.00
Equipment	$ 160,000.00				$ 160,000.00
Accum. Depr. Equip’t		$ 25,000.00				$ 25,000.00
Accounts Payable		$ 54,000.00				$ 54,000.00
Salaries Payable		$ 8,760.00				$ 8,760.00
Unearned Revenue		$ 3,430.00				$ 3,430.00
F. Elliot, Capital		$ 101,500.00				$ 101,500.00
F. Elliot, Drawings	$ 22,000.00				$ 22,000.00
Painting Revenue		$ 219,650.00		$ 219,650.00
Salaries Expense	$ 106,000.00		$ 106,000.00
Rent Expense	$ 6,050.00		$ 6,050.00
Depreciation Expense	$ 8,040.00		$ 8,040.00
Telephone Expense	$ 4,020.00		$ 4,020.00
Office Supplies Used	$ 10,080.00		$ 10,080.00
Sundry Expenses	$ 9,200.00		$ 9,200.00
Profit for the period			$ 76,260.00			$ 76,260.00
Total	$ 412,340.00	$ 412,340.00	$ 219,650.00	$ 219,650.00	$ 268,950.00	$ 268,950.00

Elliot Painting Services
	Adjusting Entries
Date	Particulars		Debit	Credit
30th June 2019	Painting revenue	Dr.	$ 219,650.00
	To profit or loss summary			$ 219,650.00
	for transferring revenue to profit and loss account
	Profit and loss summary	Dr.	$ 143,390.00
	To salaries expense			$ 106,000.00
	To rent expense			$ 6,050.00
	To Depreciation expense			$ 8,040.00
	To Telephone expense			$ 4,020.00
	To office supplies used			$ 10,080.00
	To Sundry expense			$ 9,200.00
	for transferring all the expense to profit and loss account
	Profit and loss Summary	Dr.	$ 76,260.00
	F Elliot Capital			$ 76,260.00
	for transferring profit to capital
	F Elliot Capital	Dr.	$ 22,000.00
	To F Elliot Drawings			$ 22,000.00
	for drawings adjusted against capital
	Total		$ 461,300.00	$ 461,300.00

References

Fauré, B., Cooren, F., & Matte, F. (2019). To speak or not to speak the language of numbers: accounting as ventriloquism. Accounting, Auditing & Accountability Journal.

Galley, S. K., & Heilmann, S. G. (2016). Is it just about the numbers? Evaluation of emotional intelligence and employee engagement in the accounting industry. Journal of Leadership and Management, 1(7-8).

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