Business Management Assignment

This assignment covers practical accounting concepts, including journal entries, ledger posting, trial balance extraction, and the creation of financial statements. It also explores the differences between capital expenditure and revenue expenditure.

Business Management

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Journal, posting of the journal in ledger, extracting trial balance from the journal and
making the financial statements that is profit and loss account and the balance sheet...............1
TASK 2............................................................................................................................................4
P2 Journal, posting of the journal in ledger, extracting trial balance from the ledger and
making the financial statements that is profit and loss account and the balance sheet...............4
TASK 3............................................................................................................................................7
P3 Journal, posting of the journal in ledger, extracting trial balance from the ledger accounts
and making the financial statements that is profit and loss account and the balance sheet........7
TASK 4..........................................................................................................................................11
P4 Journal, posting of the journal in ledger, extracting trial balance from the ledger accounts
...................................................................................................................................................11
TASK 5..........................................................................................................................................13
P5 Difference between the capital expenditure and revenue expenditure................................13
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Accounting refers to the recording of the financial transaction along with storing, sorting,
retrieving, summarising and presenting the result in different types of financial reports like profit
and loss account and balance sheet. The report will deals with some practical aspects of
accounting. These aspects are like recording the transaction in journals. Posting them in ledger
and then making trial balance out of the ledger accounts (Booth, 2018). And at last preparing the
financial statements which is profit and loss account and balance sheet with the help oh trial
balance. The report will also discuss the differences between the two types of expenditure which
are capital expenditure and revenue expenditure.
TASK 1
P1 Journal, posting of the journal in ledger, extracting trial balance from the journal and making
the financial statements that is profit and loss account and the balance sheet
In the books of _______
Journal
DATE PARTICULARS DEBIT CREDIT
05/04/19 Cash A/C
To capital A/C
300
300

07/04/19 Purchase A/C
To cash A/C
200
200
08/04/19 Cash A/C
To loan A/C
250
250
15/04/19 Motor van A/C
To cash A/C
150
!50
20/04/19 Cash A/C
To sales A/C
350
350
28/04/19 Rent paid
To cash A/C
50
50
29/04/19 Loan A/C
To cash A/C
200
200
30/04/19 Drawing A/C
To cash A/C
60
60
TOTAL 1560 1560
LEDGER A/C's
CASH A/C
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
05/04/19 to capital A/C 300 07/04/19 By purchase A/C 200
08/04/19 to loan A/C 250 15/04/19 by motor van 150
20/04/19 to sales A/C 350 28/04/19 by rent paid A/C 50
29/04/19 by loan paid 200
30/04/19 by drawings 60
30/04/19 by bal b/d 240
TOTAL 900 900
Capital a/c

DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
05/04/19 by cash A/C 300
30/04/19 to bal b/d 300
TOTAL 300 300
Purchase a/c
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
07/04/19 to cash A/C 200
30/04/19 by bal b/d 200
TOTAL 200 200
Loan a/c
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
29/04/19 to cash A/C 200 08/04/19 by cash A/C 250
30/04/19 to bal b/d 50
TOTAL 250 250
Motor van a/c
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
15/04/19 to cash A/C 150
30/04/19 by bal b/d 150
TOTAL 150 150
Sales a/c
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
20/04/19 by cash A/C 350
30/04/19 to bal b/d 350
TOTAL 350 350
Rent a/c
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT

28/04/19 to cash A/C 50
30/04/19 by bal b/d 50
TOTAL 50 50
Drawing A/C
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
30/04/19 to cash A/C 60
30/04/19 by bal b/d 60
TOTAL 60 60
TRIAL BALANCE
PARTICULARS DEBIT CREDIT
Cash A/C 240
Capital A/C 300
Purchase A/C 200
Loan A/C 50
Motor Van A/C 150
Sales A/C 350
Rent A/C 50
Drawing A/C 60
TOTAL 700 700
PROFIT AND LOSS A/C
PARTICULAR AMOUNT PARTICULAR AMOUNT
to purchase A/C 200 by sales A/C 350
to rent A/C 50
to profits 100
TOTAL 350 350

BALANCE SHEET
LIABILITIES AMOUNT ASSET AMOUNT
Capital (WN) 340 Motor van a/c 150
Loan 50 Cash a/c 240
TOTAL 390 390
Working note
Capital 300
+Net profits 100
-Drawings (60)
TOTAL 340
TASK 2
P2 Journal, posting of the journal in ledger, extracting trial balance from the ledger and making
the financial statements that is profit and loss account and the balance sheet
In the books of ______
Journal
DATE PARTICULARS DEBIT CREDIT
01/01/19 Cash A/C
to capital A/C
5000
5000
02/01/19 Motor van A/C
to cash A/C
600
600
03/01/19 Purchase A/C
to cash A/C
1300
1300
04/01/19 Cash A/C
to loan A/C
1000
1000
10/01/19 Motor van A/C
to cash A/C
200
200

13/01/19 Cash A/C
to sales A/C
300
300
20/01/19 Cash A/C
to sales A/C
500
500
24/01/19 Expenses A/C
to Cash A/C
150
150
27/01/19 Loan A/C
to Cash A/C
350
350
30/01/19 Drawing A/C
To Cash A/C
175
175
TOTAL 9575 9575
LEDGER A/C's
Cash a/c
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
01/01/19 to capital A/C 5000 02/01/19 by motor van 600
04/01/19 to loan A/C 1000 03/01/19 By purchase A/C 1300
13/01/19 to sales A/C 300 10/01/19 to motor van 200
20/01/19 to sales A/C 500 24/01/19 to expenses 150
27/01/19 by loan a/c 350
30/01/19 by drawings 175
31/01/19 by bal b/d 4025
TOTAL 6800 6800
Capital a/c
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
01/01/19 by cash A/C 5000
31/01/19 to bal b/d 5000
TOTAL 5000 5000

Motor van a/c
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
02/01/19 to cash A/C 600
10/01/19 to cash A/C 200
31/01/19 by bal b/d 800
TOTAL 800 800
Purchase a/c
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
03/01/19 to cash A/C 1300
31/01/19 by bal b/d 1300
TOTAL 1300 1300
Loan a/c
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
27/01/19 to cash A/C 350 04/01/19 by cash A/C 1000
31/01/19 to bal b/d 650
TOTAL 1000 1000
Sales a/c
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
13/01/19 to cash a/c 300
31/01/19 to bal b/d 800 20/01/19 to cash a/c 500
TOTAL 800 800
Expense a/c
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
24/01/19 to cash A/C 150
31/01/19 by bal b/d 150
TOTAL 150 150

Drawing a/c
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
30/01/19 to cash A/C 175 31/01/19 by bal b/d 175
TOTAL 175 175
TRIAL BALANCE
PARTICULARS DEBIT CREDIT
Cash a/c 4025
Capital a/c 5000
Motor van a/c 800
Purchase a/c 1300
Loan a/c 650
Sales a/c 800
Expense a/c 150
Drawings a/c 175
total 6450 6450
PROFIT AND LOSS A/C
PARTICULAR AMOUNT PARTICULAR AMOUNT
to purchase A/C 1300 by sales A/C 800
to expenses 150 by loss 650
1450 1450
BALANCE SHEET

LIABILITIES AMOUNT ASSET AMOUNT
Capital (WN) 4175 CASH A/C 4025
loan 650 MOTOR VAN A/C 800
4825 4825
Working note
Capital 5000
-Net loss (650)
-Drawings (175)
TOTAL 4175
TASK 3
P3 Journal, posting of the journal in ledger, extracting trial balance from the ledger accounts and
making the financial statements that is profit and loss account and the balance sheet
In the books of______
Journal
DATE PARTICULAR DEBIT CREDIT
02/01/19 Harvey a/c
to sales a/c
124
124
05/01/19 Wages a/c
to cash a/c
12
12
Purchase a/c
to rich a/c
150
150
07/01/19 Cash a/c
to smith a/c
18
18
09/01/19 Max a/c
to cash a/c
21
21
11/01/19 Cash a/c
to sales a/c
64
64

14/01/19 Wages a/c
to cash a/c
14
14
Purchase a/c
to cash a/c
75
75
15/01/19 Rich a/c
to cash a/c
162
162
20/01/19 Office expenses a/c
to cash
32
32
21/01/19 Wages a/c
to cash a/c
17
17
Cash a/c
to sales a/c
110
110
23/01/19 Office expenses a/c
to cash a/c
3
3
Cash a/c
to Harvey a/c
25
25
28/01/19 Cash a/c
to sales
84
84
Wages a/c
to cash
15
15
31/01/19 Cash a/c
to sales
30
30
Total 956 956
LEDGER A/C's
Harvey a/c
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
01/01/19 to bal b/d 39 23/01/19 by cash A/C 25

02/01/19 to sales A/C 124 31/01/19 By bal b/d 138
Total 163 163
Sales a/c
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
02/01/19 by harvey 124
11/01/19 by cash A/C 64
21/01/19 by cash A/C 110
28/01/19 by cash A/C 84
31/01/19 to bal b/d 412 31/01/19 by cash A/C 30
Total 412 412
Wages a/c
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
05/01/19 to cash A/C 12
14/01/19 to cash A/C 14
21/01/19 to cash A/C 17
28/01/19 to cash A/C 15 31/01/19 by bal b/d 58
Total 58 58
Cash a/c
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
07/01/19 to smith a/c 18 05/01/19 by wages 12
11/01/19 to sales A/C 64 09/01/19 by max 21
21/01/19 to sales A/C 110 14/01/19 by wages 14
23/01/19 to harvey 25 14/01/19 By purchase A/C 75
28/01/19 to sales A/C 84 15/01/19 by rich 162
31/01/19 to sales A/C 30 20/01/19 by office expense 32
21/01/19 by wages 17
23/01/19 by office expenses 3
31/01/19 to bal b/d 20 28/01/19 by wages 15

Total 351 351
Purchase a/c
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
05/01/19 to rich a/c 150
14/01/19 to cash A/C 75 31/01/19 by bal b/d 225
Total 225 225
Rich a/c
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
15/01/19 to cash A/C 162 01/01/19 by bal b/d 12
05/01/19 By purchase A/C 150
Total 162 162
Smith a/c
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
01/01/19 to bal b/d 18 07/01/19 by cash A/C 18
Total 18 18
Max a/c
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
09/01/19 to cash A/C 21 01/01/19 by bal b/d 21
Total 21 21
Office expense a/c
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
20/01/19 to cash A/C 32
23/01/19 to cash A/C 3 31/01/19 by bal b/d 35
Total 35 35

TRIAL BALANCE
PARTICULARS DEBIT CREDIT
Sales 412
wages 58
cash 20
purchase 225
Office expense 35
Suspense A/C 114
Total 432 432
PROFIT AND LOSS A/C
PARTICULAR AMOUNT PARTICULAR AMOUNT
to purchase A/C 225 by sales A/C 412
to wages 58
to office expenses 35
to net profit 94
412 412
BALANCE SHEET
LIABILITIES AMOUNT ASSET AMOUNT
Capital(WN) 1043 Harvey a/c 138
Suspense a/c 114 inventory 458
furniture and fittings 198
CASH A/C 20
cash in hand 343
Total 1157 1157

Working note
Since the capital was not give so it was calculated using a formula
Total assets – liabilities which is as follows
Harvey+ inventory+ furniture& fittings+ cash+ cash in hand- (suspense a/c)
that is 138+458+198+20+343-(114)= 1043
TASK 4
P4 Journal, posting of the journal in ledger, extracting trial balance from the ledger accounts
DATE PARTICULAR DEBIT CREDIT
02/06/19 Claire a/c
to sales
8075
8075
13/06/19 Purchase a/c
to Georgina
11160
11160
14/06/19 Hywel a/c
to sales a/c
8550
8550
20/06/19 Cash a/c
to sales
6000
6000
21/06/19 Purchase a/c
to Andrew
4410
4410
22/06/19 Sales return a/c
to Claire
1000
1000
24/06/19 Cash a/c
to sales
4850
4850
Cash a/c
to Claire
7075
7075
25/06/19 Cash a/c
to Hywel
8550
8550

Georgina a/c
to cash
11160
11160
27/06/19 Andrew a/c
to cash
4410
4410
TOTAL 75240 75240
LEDGER
CASH A/C
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
20/06/19 to sales A/C 6000 25/06/19 by Georgina 11160
24/06/19 to sales A/C 4850 27/06/19 by Andrew 4410
24/06/19 to Claire 7075
25/06/19 To Hywel 8550 27/06/19 by bal b/d 10905
TOTAL 26475 26475
SALES A/C
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
02/06/19 by Claire 8075
14/06/19 by cash A/C 6000
27/06/19 to bal b/d 18925 24/06/19 by cash A/C 4850
TOTAL 18925 18925
PURCHASE A/C
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
13/06/19 to Goergina 11160
21/06/19 to Andrew 4410 27/06/19 by bal b/d 15570
TOTAL 15570 15570
Claire a/c
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT

02/06/19 to sales A/C 8075 22/06/19 by sales return 1000
24/06/19 by cash A/C 7075
TOTAL 8075 8075
Georgina a/c
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
25/06/19 to cash A/C 11160 13/06/19 By purchase A/C 11160
TOTAL 11160 11160
Hywel a/c
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
14/06/19 to sales A/C 8550 25/06/19 by cash A/C 8550
TOTAL 8550 8550
Andrew a/c
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
27/06/19 to cash A/C 4410 21/06/19 By purchase A/C 4410
TOTAL 4410 4410
Sales return a/c
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
22/06/19 to Claire 1000 27/06/19 by bal b/d 1000
TOTAL 1000 1000
TRIAL BALANCE
PARTICULAR DEBIT CREDIT
cash 10905
sales 18925
purchase 15570
Sales return 1000

Suspense a/c 8550
Total 27475 27475
TASK 5
P5 Difference between the capital expenditure and revenue expenditure
There is a lot of difference between capital and revenue expenditure (Mio, 2016). The
difference between them is as follows:
Basis Capital expenditure Revenue expenditure
Meaning It is the amount spend on the
goods and services which are
used for a longer duration like
more than one year(Collis,
Holt and Hussey, 2017).
It is that amount which is
spend on goods and services
which is consumed for a
shorter period of time that is
within a year.
Nature It is non recurring in nature It is recurring in nature
Need The need is to improve the
capacity of the business and to
grow the business.
Here the need is to run the
existing business capacity
properly
Duration It covers those expenditure
which are for more than a year.
This covers expenditure which
are incurred for within a year
(Bui, Arena, and McCutcheon,
2015).
Impact in financial statement It will be shown in the balance
sheet.
It will be shown in the trading
A/C and profit and loss A/C
Capitalization All these expenditure are
capitalized
These types of expenditure are
not capitalized.
Benefits These expenditures gives
benefits in the current year as
well as in the future also
This type expenditure drives
benefits only for current year.