Double Entry Bookkeeping Transactions and Business Transactions

UNIT 10

Contents
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
P1. How to record double entry bookkeeping transactions in a timely and accurate way..........3
P2 Implement a range of business transactions with the help of books of prime entry, double
entry bookkeeping, ledgers and journals.....................................................................................4
P3. With the help of data provided, extract ledger balance into a trail balance fir a company to
accurately record transactions....................................................................................................12
P4. Develop a bank reconciliation statement with the help of give information for a company.
...................................................................................................................................................13
P5. State the differences and role among suspense and control accounts.................................15
P6. Perform control account reconciliation for accounts receivable and payable from given
data.............................................................................................................................................17
CONCLUSION..............................................................................................................................18
REFERENCES..............................................................................................................................19

INTRODUCTION
The report prepared as under takes in account the explanation of Bookkeeping which can be
explained as recording of all finance based transactions which include sales, purchase, payment
and receipts. In the report as under, transactions can be recorded in a chronological order which
would serve as a better technique and method to understand terms in a better way. Ledger
accounts and trial balances would be developed and prepared for showing accurate and reliable
way for recording entries as well as transactions. In addition, bank reconciliation statement
reflects bank related entries and identify errors & omissions being made. It also takes into
account suspense and control account which would be differentiated and performed for accounts
payable and receivable as well (Aleksieva, Valchanov and Huliyan, 2020).
TASK
P1. How to record double entry bookkeeping transactions in a timely and accurate way.
Double Entry bookkeeping is a way of recording the transaction into the books of account
in which at least two accounts get affected one is debit and another one is credit and also have
the same amount.
Double entry bookkeeping contain a process which are as follows-
 Produce document: The very first step of double entry bookkeeping is producing a
document which is generally known as invoice. In this document all the information
related to product and the costumer are included like all the items which consumer
purchase from the seller, date of the transaction, address and name of the customer, and
the last amount payable by the customer for purchasing the product.
 Recording: The next step of double entry bookkeeping is the recording of the transaction
in the books of accounts by the help of the document which is known as invoice consist
all the information like date, amount, invoice no, and address of the customer, some of
the information from invoice are used in recording the transaction like name, amount and
date.
 Update accounts: Each and every account have a separate ledger which contain
information like date and amount. These ledgers may contain various transaction and all
these have to be verified by the accountant of the organisation and if any error is found

then, it has been update through this activity the accounts can be accurate (Baralla and
et.al., 2021).
 Debit and Credit: In double entry bookkeeping every transaction have equal debit and
equal credit and if any mistake is done by the organisation then the accounts will not
match so the organisation have to be efficient and focused while recording the
transactions. It helps the organisation to make the business decision if the accounts are
accurate.
 Chart of accounts: It refers to the statements in which all transaction related to the
businesses are recorded. It shows the accounts that are needed for running a business and
to prepare financial statements.
 Mathematical formula of double entry: It is known as the accounting equation which is
used to maintain the structure of the ledger. The accounting equation is Capital = Assets-
liabilities.
 Preparation of Trial Balance: Trail consist all the accounts of the ledgers with their
respective debit and credit balance. It helps the organisation to evaluate all accounts and
rectify those accounts if they have any kind of error.
 Preparation of Financial Statements: After preparing trail balance organisations have to
prepare the financial statements of the business which are profit and loss account,
balance-sheet, cash-flow statements and notes to accounts all these accounts and
statements helps the organisation to access the financial position of the business. Like
profit and loss account shows the income and expenditure during the accounting period,
balance-sheet shows the all assets and liabilities of the business, cash flow statement
shows the net inflow and outflow of the cash and Notes to account helps the investors to
understand the financial position of the organisation (Chari, 2022).
P2 Implement a range of business transactions with the help of books of prime entry, double
entry bookkeeping, ledgers and journals.
1. Journals: It is an account which considers all the finance based transactions which are
connected with accounts used for future reconciling and transfer of data such as general
ledger. It consists of the amount of transaction and date which would be a short
description. Main information which is included in journals can be explained as expenses,
sales, inventory, debts and cash. Such transactions would be recorded on a daily basis