DIMCHO VITANOVA RBT1.[10385] (1)

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MODULE TITLE: RECORDING BUSINESS TRANSACTIONS Assignment: A1 Student name: Dimcho Vitanova Student id: 21552649 Campus: Nottingham Teacher name: Babajide Babatope

Table of Contents INTRODUCTION .................................................................................................................. 3 ACCOUNTING PRINCIPLE .................................................................................................... 3 IMPORTANCE OF ACCOUNTING .......................................................................................... 4 THE MAIN PROCESS OF ACCOUNTING ................................................................................. 5 REFERENCE ......................................................................................................................... 7

INTRODUCTION Barclays Plc operates as a bank holding company that engages in the business of providing retail banking, credit cards, corporate and investment banking and wealth management services. The company operates through two divisions: Barclays UK and Barclays International. The Barclays UK division comprises the U.K. retail banking operations, U.K. consumer credit card business, U.K. wealth management business and corporate banking for smaller businesses. The Barclays International division comprises the corporate banking franchise, the investment bank. Barclays PLC, a one-bank (Barclays Bank) holding company and the United Kingdom's largest bank, has it origins in the 18th centuryIn 2021 Barclays Bank plc was ranked the 1st largest bank in the United Kingdom in terms of total assets, having 11.93% of the domestic market share (Forbes, n.d.). Barclays moves, lends, invests and protects money for customers and clients worldwide(Statista, 2018). ACCOUNTING PRINCIPLE 1] Going Concern This assumption is based on the principle that while making the financial statements of an entity we will assume that the company has no plans of winding up in the near future (Toppr- guides, 2018). EXAMPLE : 23Aug 2021. A serious financial problem has caused the Barclays to be unable to meet its obligations. There is a bailout by the government for this company as well as a guarantee of all payments to creditors on the part of the government. Despite its current weak financial situation, the national company has continued to operate as a going concern.

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2) Consistency This assumption states that unless and until things are mentioned in the accounting policies , procedures, standards, etc, Things that have been followed in accounting remains the same. This allows for uniformity in the financial statements of a company over the years. 3] Accrual Under this assumption, accounting transactions are recorded in the books of accounts when they occur. This is known as the Mercantile System. So as opposed to the cash system, in accrual concept, the revenue or expenditure is recognized in the year they are realized. 4) Double Entry Double Entry system seeks to record every transaction in money or money’s worth in its double aspect – the receipt of a benefit by one account and the surrender of similar benefit by another account 5) Business Entity The business entity concept states that the transactions associated with a business must be separately recorded from those of its owners or other businesses. IMPORTANCE OF ACCOUNTING Every year Barclays must produce statutory accounts that expose everything the company has. The main purpose of financial accounting is to prepare financial reports that provide information about the bank’s performance to external parties such as investors, creditors, tax authorities and more. The major financial statements are designed to provide a picture of the overall financial position and performance of the bank. The three statements are interrelated; the balance sheet reflects the combination of assets (including cash) and claims (including the owner’s capital) of the business at a particular point in time. Both the cash flow statement and

the profit and loss account explain the changes over a period of two of the items in the balance sheet, namely cash and owner’s claim, respectively (home.barclays, n.d.). Accountancy Cloud is a challenger accountancy service offering cloud-based software to automate bookkeeping. To begin, Accountancy Cloud isn’t trying to force companies to completely rip out their bookkeeping software and start from scratch, but instead, collect the electronic information they already have. By integrating with bank accounts, credit cards, expenses and accounting software such as Xero and Sage, the platform offers small businesses a smarter solution for their back-office, alleviating the burden of time consuming manual tasks (Tripp, n.d.). THE MAIN PROCESS OF ACCOUNTING. Accounting impacts all aspects of bank operations and requires recordkeeping systems that generate accurate and reliable information and reports needed to meet the needs of customers, shareholders, supervisory agencies, tax authorities, and courts of law. (Corporate Finance Institute, n.d.) #1 Transactions Transactions: Financial transactions start the process. If there were no financial transactions, there would be nothing to keep track of. Transactions may include a debt payoff, any purchases or acquisition of assets, sales revenue, or any expenses incurred. Example : A company receives $300 in sales on their software products. This is the starting point of the accounting cycle for this transaction. #2 Journal Entries Journal Entries : With the transactions set in place, the next step is to record these entries in the company’s journal in chronological order. In debiting one or more accounts and crediting one or more accounts, the debits and credits must always balance.

Example : The $300 transaction is entered based on the date it occurred to align with the chronological order of the other transaction entries. A $300 cash sale will involve a Debit of $300 to Cash and a Credit of $300 to Sales Revenue. #3 Posting to the General Ledger (GL) Posting to the GL: The journal entries are then posted to the general ledger where a summary of all transactions to individual accounts can be seen. #4 Trial Balance Trial Balance: At the end of the accounting period (which may be quarterly, monthly, or yearly, depending on the company), a total balance is calculated for the accounts. Example: To keep this simple, let’s prepare a trial balance for one day while ignoring Cost of Goods Sold. To prepare the trial balance, you need to compile data from all ledger accounts. Let’s say the company also had $700 in credit sales—a debit of $700 to Accounts Receivable and a credit of $700 to Sales Revenue—and bought $200 of inventory on credit from a vendor—a credit of $200 to Accounts Payable and a debit of $200 to Inventory. #5 Worksheet Worksheet: When the debits and credits on the trial balance don’t match, the bookkeeper must look for errors and make corrective adjustments that are tracked on a worksheet. compare corresponding accounts—like Accounts Receivable and Sales Revenue—to try to find obvious mistakes. #6 Adjusting Entries Adjusting Entries : At the end of the company’s accounting period, adjusting entries must be posted to accounts for accruals and deferrals. Example : In January, the company pays $12,000 in rent for the whole year ($1,000 a month). The original journal entry was a $12,000 debit to Rent Expense and a $12,000 credit to Cash. At the end of the accounting period (in this case, a month), the adjusting entry would be an $11,000 debit to Prepaid Rent and an $11,000 credit to Rent Expense. This reflects that only $1,000 of rent was actually used in January. For the remaining eleven accounting periods, the adjusting entry will be a $1,000 debit to Rent Expense and a $1,000 credit to Prepaid Rent.

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#7 Financial Statements Financial Statements : The balance sheet, income statement, and cash flow statement can be prepared using the correct balances. Example : Let’s say your income statement shows Total Revenues of $1000 and Total Expenses of $500. Your Net Income is Total Revenues - Total Expenses = $500. This $500 is moved to Retained Earnings at the end of the fiscal year during the closing process. #8 Closing Closing: The revenue and expense accounts are closed and zeroed out for the next accounting cycle. This is because revenue and expense accounts are income statement accounts, which show performance for a specific period. Balance sheet accounts are not closed because they show the company’s financial position at a certain point in time. CONCLUSION Accounting impacts all aspects of bank operations and requires recordkeeping systems that generate accurate and reliable information and reports needed to meet the needs of customers, shareholders, supervisory agencies, tax authorities, and courts of law. Bank accounting includes preparation of permanent records for every transaction. Therefore, the statement of bank shows a general picture of the accounts of bank while the different books of accounts offer a detailed analysis of the items. In consistency with other fields, all the banks are similar with regards to bank accounting. Consequently, the same principles are followed in every bank irrespective of their size or nature of control. All the books of accounts form a part of the general books. Barclays is a very famous bank, with an extremely large number of clients and it attaches great importance to accounting in the company, because the success of the bank and keeping all financial things in order dictates its success. REFERENCE . Corporate Finance Institute. (n.d.). Accounting Cycle . [online] Available at:

https://corporatefinanceinstitute.com/resources/accounting/accounti ng-cycle/ [Accessed 31 Oct. 2022]. Forbes. (n.d.). Barclays | Company Overview & News . [online] Available at: https://www.forbes.com/companies/barclays/? sh=58042c0b5358 [Accessed 31 Oct. 2022]. home.barclays. (n.d.). Accountancy Cloud | Challenger Accountancy Service | Barclays . [online] Available at: https://home.barclays/who- we-are/innovation/barclays-accelerator/companies/the-accountancy- cloud/ [Accessed 31 Oct. 2022]. Statista. (2018). Barclays Group employment numbers by country 2018 | Statista . [online] Available at: https://www.statista.com/statistics/441855/barclays-group- employees-by-country-worldwide/. Tripp, R. (n.d.). Accounting In Banks | How Banks Work . [online] Available at: https://howbankswork.com/accounting-in-banks/. Toppr-guides. (2018). Toppr.com . [online] Available at: https://www.toppr.com/guides/principles-and-practice-of- accounting/accounting-concepts/fundamental-accounting- assumptions/.