Prepared By: Malik Muhammad Mehran | MBA Executive 2012-2014
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HBL Cantt BranchAccounting Cycle Study
Prepared By: Malik Muhammad Mehran | MBA Executive 2012-2014
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Group Members
• Abrar • Awais Bukhari• Muhammad Zahid• Muhammad Ashraf• Malik Muahmmad Mehran
Prepared By: Malik Muhammad Mehran | MBA Executive 2012-2014
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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.
Prepared By: Malik Muhammad Mehran | MBA Executive 2012-2014
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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.
Debit and credit merely signify position— left and right, respectively .
Both sided recorded amount must be equal.
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.
Prepared By: Malik Muhammad Mehran | MBA Executive 2012-2014
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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
__________________________________________________
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