HBL Cantt Branch Accounting Cycle

Prepared By: Malik Muhammad Mehran | MBA Executive 2012-2014

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HBL Cantt BranchAccounting Cycle Study


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Group Members

• Abrar • Awais Bukhari• Muhammad Zahid• Muhammad Ashraf• Malik Muahmmad Mehran


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History Of HBLHBL established operations in Pakistan in 1947 and moved

its head office to Karachi. Our first international branch

was established in Colombo, Sri Lanka in 1951 and Habib

Bank Plaza was built in 1972 to commemorate the bank’s

25th Anniversary.

With a domestic market share of over 40%, HBL was

nationalized in 1974 and it continued to dominate the

commercial banking sector with a major market share in

inward foreign remittances (55%) and loans to small

industries, traders and farmers. International operations

were expanded to include the USA, Singapore, Oman,

Belgium and Maldives and the Netherlands.


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On December 29, 2003 Pakistan's Privatization

Commission announced that the Government of Pakistan

had formally granted the Aga Khan Fund for Economic

Development (AKFED) rights to 51% of the shareholding

in HBL, against an investment of PKR 22.409 billion (USD

389 million). On February 26, 2004, management control

was handed over to AKFED. The Board of Directors was

reconstituted to have four AKFED nominees, including

the Chairman and the President/CEO and three

Government of Pakistan nominees. Now HBL has more

than 1500 branches all over the world.

ACCOUNTING CYCLE

The Accounting Cycle is a series of steps. Starts with making accounting entries for

each transaction and goes through closing the books.

DEFINITION

The accounting cycle refers to nine steps, repeated in each reporting period, to verify transactions and prepare financial statements for internal and external users.

These 9 steps are- Analyze Journalize Post A Business Transaction Unadjusted Trial Balance Adjusting Preparing Preparing Financial Statements Closing the account Post-Closing Trial Balance

Accounting

Cycle

9-Post closing

TrialBalance

1-Analyze

2-Journalize

3-PostA

Transaction

4-Unadjusted

TrialBalance

5-Adjusting

6-Preparing

7-PreparingFinancial

Statement

8-ClosingAccount

1-Analyze- The first step of accounting cycle. First analyze a transaction and its source

documents. Apply double-entry accounting to

recognize its effect on account balances.

2- Journalize-

Transactions are recorded in a General Journal. Journalizing leaves a record of all transactions

in one document. Helping to prevent mistakes and linking the

debits and credits for each transaction.

3-Post A Business Transaction- The third step in the accounting cycle is

posting. Also known as LEDGER Account. After recording in the journal, transaction

are transferred and posted to the ledger. All transactions for the same account are

collected and summarized. It is important to leave this paper trail to

verify accuracy and troubleshoot later in the process if accounts are not adding up.

4-Prepare An Unadjusted Trial Balance

Preparing an unadjusted trial balance tests the equality of debits and credits as recorded in the general ledger.

Additionally, this provides the balances of all the accounts that may require adjustment in the next step.

http://www.answers.com/topic/unadjusted-trial-balance

Debit and credit merely signify position— left and right, respectively .

Both sided recorded amount must be equal.

http://www.answers.com/topic/signify

5-Adjusting of Trial Balance-

The fifth step, adjusting, accounts for internal transactions, like the use of prepaid rent or unearned revenue.

Adjustment may be required to record an expense that may have been incurred but not yet recorded.

6-Prepare an adjusted trial balance-

The sixth step is the preparation of the adjusted trial balance.

Again tests the equality of debits and credits, encompassing all internal and external transactions for the reporting period.

7-Preparing Financial Statements-

1. Financial statements are prepared.2. The Income Statement and Statement

of Owner's Equity are prepared first, followed by the Balance Sheet, which pulls information from the Statement of Owner's Equity.

3. These are one of the primary outputs of the financial accounting system.

8-Closing the account

The eighth step in the accounting cycle is to close accounts in preparation for the next accounting period.

Temporary or nominal accounts are closed, while permanent or real accounts carry their balances into the next period.

Once completed, all revenue, expense, withdrawal and Income Summary balances should be zero.

9-Post-Closing Trial Balance-

Finally, the post-closing trial balance lists the balances of the accounts that were not closed, such as assets, liabilities, and owner's equity.

This trial balance helps verify that permanent accounts balance, with equal debit and credit sums, and that all temporary accounts were closed properly.

DEFINITION- Series of steps in recording an

accounting event from the time a transaction occurs to its reflection in the financial statements; also called bookkeeping cycle, The order of the steps in the accounting cycle are: recording in the journal, posting to the ledger, preparing a trial balance, and preparing the financial statements.


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Income Statement HBL Cantt BranchYear Ended 31-12-2011

Revenue1) Working capital

financesMarkup on Running FinanceMarkup on Cash FinanceMarkup on Seasonal FinanceMarkup on Easy Running FinanceMarkup on Small Medium EnterprisesMarkup on Term Deposit RateMarkup on A/F Production

Markup on A/F Development

15.915 M 2.767 M 2.800 M 0.830 M

1.700 M

0.170 M 5.500 M 0.500 M


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Term FinancesMarkup on Auto lease

Markup on House FinanceMarkup on Personal Loan

Total Interest Revenue

0.100 M19.50 M 4.40 M 3.00 M0.700 M_____________33.98 M_____________


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Profit on Saving AccountsTotal Profit on Fixed DepositsFCY Deposits

Fee/Commission Charges

1) Debit Card/ ATM Card Charges

2) Credit Card Fees3) On-Line Charges4) DD/Banker Cheque

Charges

11.00 M 1.00 M0.424 M

2.50 M 1.50 M 5.50 M 2.00 M


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Other Revenues

1) Cheque Book Charges2) On-Line Clearing

Charges3) Statement Charges4) Stop Payment

Charges5) Commission on Bills

( WASA, WAPDA, PTCL, SNGPL)

Total Revenues

0.70 M0.20 M0.30 M0.03 M1.00 M 35.15M 33.98M __________ 69.14M __________


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Expenses

1) Salaries & Allowances2) Rent Expenses3) Travelling Expenses4) Entertainment Expenses5) Stationary & Printing6) Repairing & Maintenance7) Law Charges8) Courier Charges9) Telephone Charges10)Electricity Charges11)Non-Markup interest

Expenses12)Security Charges

2.500 M 1.000 M 0.500 M 0.500 M 1.100 M 0.900 M 1.100 M 0.300 M 0.400 M 0.800 M 40.00 M 0.500 M


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13) Diesel Expense14) Cash Management

Total Expenses

Net Income

0.45 M4.80 M____________________ 54.53 M

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14.61 M


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HBL Cantt BranchBalance SheetOn 31-12-2011

AssetsCash On Hand LCYCash On Hand FCYNational Price BondTotal Trade FinanceHBL Easy Loan R/FinRunning FinanceCash Fin SeasonalAgri Fin ProductionAgri Fin DevelopmentOther Assets

Total Assets

150.74 M45.820 M 47.208 M69.560 M58.005 M137.34 M99.728 M79.970 M75.300 M89.933 M . 653.039 M


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LiabilitiesBranch AccountBusiness Value A/C Basic Banking A/CHBL Value A/CHBL Freedom A/COther LiabilitiesBankr Liab LCBankr Liab L/G

Total Liabilities

CapitalNet Income

Total Liab and Capital

7.000 M295.0 M31.90 M83.98 M96.17 M294.8 M1.674 M28.47 M . 838.994 M

14.610 M 853.604 M


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THE END

Documents

HBL Cantt Branch Accounting Cycle