Accounting Fundamentals INTRODUCTION 1 Task 11 (a) Ledger Accounts with the Help of Accounting Transaction of Maxim 4 (b) Trial Balance of Maxim 4 (c) Income Statement and Financial Statement of Pendo

Accounting fundamentals INTRODUCTION 1 Task 11 (a) Ledger accounts with the help of accounting transaction of Maxim 1 (b) Trial balance of Maxim4 (c) Income statement and financial statement of Maxim 4 Task 25 (a) Pendo's Ledger account with the helps of above mentioned transaction including date and description 5 (b)Trial balance of Pendo as prepared on 31st January 8 (c)Income statement and financial statement of Pendo company 8 Financial statement that shows financial position 9

Accounting
fundamentals

Table of Contents
INTRODUCTION...........................................................................................................................1
Task 1 ..............................................................................................................................................1
(a) Ledger accounts with the help of accounting transaction of Maxim ..............................1
(b) Trial balance of Maxim..........................................................................................................4
(c) Income statement and financial statement of Maxim ............................................................4
Task 2 ..............................................................................................................................................5
(a) Pendo's Ledger account with the helps of above mentioned transaction including date and
description ...................................................................................................................................5
(b)Trial balance of Pendo as prepared on 31st January ..............................................................8
(c)Income statement and financial statement of Pendo company................................................8
Financial statement that shows financial position ......................................................................9
Task 3.............................................................................................................................................10
a) Mafuta's Ledger accounts .....................................................................................................10
b) Trial balance prepared as on 31st January of Mafuta............................................................12
(c) Mafuta's Profit and loss statement and financial position statement as on 31st January ....12
Task 4.............................................................................................................................................13
(a) Recording of transaction and ledger accounts .....................................................................13
Task 5.............................................................................................................................................17
Difference between revenue and capital expenditure ..............................................................17
CONCLUSION..............................................................................................................................18
REFERENCE.................................................................................................................................19

INTRODUCTION
Accounting is the basic concept in any organisation that gives ideas to maintain various
accounts and ledger in order to run a business. Fundamental accounting refers basic concept that
helps to attain company's objectives by following accounting concept and convention (Barranco
and et.al., 2016). The main purpose of this report is to prepare ledger accounts, trial balance and
profit and loss accounts that will show enterprise's financial situation and will help to take
financial decision. It involves several guidelines such as generally accepted accounting principles
GAAP that helps to understand by accountant and users to be followed(Sacco, 2017). In this
report various topics and calculation will be covered that will define company's financial position
after preparing accounts. This report also will define difference between revenue and capital
expenditure by following international accounting standards. (Basrur, 2017).
Task 1
Journal entry: This is recording of financial data that is taken from journal voucher by
concerning business transaction in journal like debit equal credit (Reible, 2017). Moreover, it
helps to analyse effects of transaction on an enterprise's financial position. It helps to show
financial position of organisation by maintaining accounts (Grunwald, 2017).
Ledger posting: It is the second step after preparing journal entries that helps to transfer entries
in journal into accounts of ledger. It helps to classifying stage of accounting and its transaction.
Moreover, this is connected with initial information of business transaction (Kanodia and Sapra,
2016).
(a) Ledger accounts with the help of accounting transaction of Maxim
Date Particular Debit amount (£) Credit amount (£)
5th April Cash a/c 300
To capital 300
5th April Purchase a/c 200
To cash a/c 200
1

5th April Cash a/c 250
Received loan
from Tatiana 250
5th April Purchase a/c 150
To cash a/c 150
5th April Cash a/c 350
To sale a/c 350
5th April Rent a/c 50
To cash a/c 50
5th April Loan a/c 200
To cash a/c 200
5th April Drawing a/c 60
To cash a/c 60
Cash a/c
Date Particular Amount Date Particular Amount
5th April To capital a/c 300
5th
April By purchase a/c 200
5th April To loan 250 5th By motor van 150
2

received from
Tatiana April
5th April To sales 350
5th
April By rent 50
5th
April By loan paid 200
30th
April By drawing 60
30th
April By closing balance 240
900 900
Capital a/c
Date Particular Amount Date Particular Amount
30th
April To drawing 60
5th
April By cash 300
30th
April
To closing
balance 240
300 300
Purchase
a/c
Date Particular Amount Date Particular Amount
5th April To cash 200
30th
April By trading a/c 200
200 200
Loan a/c
3

Date Particular Amount Date Particular Amount
5th April To cash 200
5th
April By cash 250
To closing
balance 50
250 250
Motor van
Date Particular Amount Date Particular Amount
5th April To cash 150
30th
April By closing balance 150
150 150
Sale a/c
Date Particular
(£)
Amount Date Particular
(£)
Amount
5th April To trading a/c 350
5th
April By cash 350
350 350
Rent a/c
Date Particular (£)Amount Date Particular
(£)
Amount
5th April To cash 50
5th
April By P&L a/c 50
50 50
Drawing
A/c
4

Date Particular
(£)
Amount Date Particular
(£)
Amount
5th April To cash a/c 60
5th
April By capital a/c 60
60 60
(b) Trial balance of Maxim
Serial .
N. Particulars
Debit
(£)Amount
Credit
(£)Amount
1 Cash a/c 240
2 Capital 240
3 Purchase 200
4 Loan 50
5 Motor van 150
6 Sales 350
7 Rent 50
Total 640 640
(c) Income statement and financial statement of Maxim
Particular Amount
Sales 350
(-) Cost of good sold -100
(Purchase price -
closing stock)
Gross profit 250
Paid rent 50
5

NET PROFIT 200
Financial statement end of year that shows financial position
ASSETS
Non Current assets
Motor Van 150
Current assets
Cash 240
Closing stock 100
Total assets 490
LIABLITIES
Capital 240
(+)profit 200 440
Loan amount 50
Total liabilities 490
Task 2
(a) Pendo's Ledger account with the helps of above mentioned transaction including date and
description
Journal entries
Date Particulars (£)amount (£)amount
1st January Cash a/c 5000
To capital a/c 5000
(Invested capital)
6

2nd January Motor van 600
To cash a/c 600
(Being motor van purchased)
3rd January Purchase a/c 1300
To cash a/c 1300
(Being purchase made)
4th January Cash a/c 1000
To loan form Sergei a/c 1000
(Loan received from Sergie)
10th January Motor expenses 200
To cash a/c 200
(Being motor expenses paid)
13th January Cash a/c 300
To sales 300
(goods sold)
20th January Cash a/c 500
To sales 500
(goods sold )
24th January Storage Expenses a/c 150
To cash a/c 150
(being storage expenses paid)
27th January Loan a/c 350
To cash a/c 350
(payment of loan taken)
7

30th January Drawing a/c 175
Cash 175
(with drawl from business )
Ledger accounts
Cash A/c
Date Particular Amount (£) Date Particular
Amount
(£)
1st January To capital a/c 5000 2nd January By motor van 600
4th January
To loan form
sergri 1000 3rd January By Purchase 1300
13th January To sales 300 10th January
By motor
expenses 200
20th January To sales 500 24th January
By storage
expenses 150
27th January
By repayment
of loan 350
30th January By drawing 175
31st January
By closing
balance 4025
6800 6800
Motor A/c
Date Particular Amount (£) Date Particular Amount (£)
2nd January To Cash 600
31st
January
By closing
balance 600
600 600
8

Purchase a/c
Date Particular Amount (£) Date Particular Amount (£)
3rd January To Cash 1300 31st January
By trading
a/c 1300
1300 1300
Loan form Sergie A/c
Date Particular Amount (£) Date Particular Amount (£)
27th January To Cash 350 4th January By cash 1000
31st January To balance c/d 650
1000 1000
Sales A/c
Date Particular
Amount
(£) Date Particular
Amount
(£)
31st January To trading a/c 800 13th January By cash 300
20th January By cash 500
800 800
Storage expenses A/c
Date Particular Amount (£) Date Particular Amount (£)
24th January To Cash 150 31st January By P&L a/c 150
150 150
Drawing A/c
Date Particular Amount (£) Date Particular Amount (£)
30th January To Cash 175
31st
January By Capital a/c 175
175 175
9

Capital A/c
Date Particular Amount (£) Date Particular Amount (£)
31st January To Drawing 175 1st January By cash 5000
31st January To balance c/d 4825
5000 5000
Motor expenses
Date Particular Amount (£) Date Particular
Amount
(£)
10th January To Cash 200 31st January By P&L a/c 200
200 200
(b)Trial balance of Pendo as prepared on 31st January
Serial no. Particulars (£) Dr. amount (£) Cr. amount
1 Cash 4025 -
2 Motor Van 600 -
3 Purchase 1300 -
4 Loan a/c - 650
5 Sales a/c - 800
6 Storage expenses 150 -
7 Capital - 4825
8 Motor expenses 200 -
Total 6275 6275
(c)Income statement and financial statement of Pendo company
Statement of profit and loss
Particulars (£)Amount
10

Sale 800
(-) Cost of good sold 500
(Purchase amount -closing
stock)
Gross profit 300
(-) expenses
Storage 150
Motor car expenses 200
Net loss -50
Financial statement that shows financial position
Non current assert (£) Amount
Motor van 600
Current assets
cash 4025
Stock 800
Total assets 5425
Equity
Capital 4825
(-)Net loss -50 4775
Current liability
Loan taken form Sergei 650
Liabilities total 5425
11

Task 3
a) Mafuta's Ledger accounts
12

Payable to Max's a/c
13

Date Particular Amount (£) Date Particular Amount (£)
9th jan To cash a/c 21 1st jan By Balance b/d 21
Payable to Rich's A/c
Date Particular (£)Amount Date Particular (£)Amount
15th jan To cash a/c 162 1st jan By Balance b/d 12
5th jan By purchase a/c 150
162 162
Inventory a/c
Date Particular (£)Amount Date Particular (£) Amount
1st Jan To Balance B/d 458 31st jan By Trading A/c 458
31st jan To Trading A/c 374 31st jan By Balance c/d 374
1st Feb To Balance B/d 374
b) Trial balance prepared as on 31st January of Mafuta
Trial Balance at 31 January
Particulates Dr. (£) Cr.(£)
Cash in hand A/c 323 -
Capital A/c - 1049
Fittings and fixtures a/c 230 -
Sales A/c - 412
Wages A/c 58 -
Purchase A/c 225 -
Office expenses A/c 3 -
Receivables A/c - -
Harvey 138 -
Moon 26 -
14

Inventory a/c 458 -
1461 1461
(c) Mafuta's Profit and loss statement and financial position statement as on 31st January
Statement of Profit and Loss
as on 31st janauary
Particulates (£)Amount
Sales 412
(-) Cost of sales 309
Gross profit 103
(-) Expenses / spendings
Wages 58
Office Expenses 3 61
Net Profit 42
Financial position Statement for the month ended on 31 January
Particulates (£) Amount
Non current assets
Fittings and fixtures 230
Current assets
Stock 374
Trade receivables (138+26) 164
Cash 323 861
Total Assets 1091
15

Capital account 1049
Add : Net Profit 42 1091
Total Liabilities 1091
Working note and caaculation:
Cost of good sold = Opening stock – Closing inventory
225 + 458- 374 = 309
Task 4
(a) Recording of transaction and ledger accounts
Date Particular Debit amount Credit amount
2nd June Claire a/c 8500
To sales a/c 8500
(Being goods sold )
13th June Purchase a/c 12000
To Georgina 12000
(Being material purchased)
14th june Hywel a/c 8550
To sales a/c 8550
(Being sales are made)
20th June Cash a/c 6000
To sales a/c 6000
(goods sold at cash)
21st June Purchase a/c 4500
To Andrew 4500
16

(Being goods purchased)
22nd June Sales return a/c 1000
To Claire a/c 1000
(Being sales return are given)
24th June Mandy a/c 5000
To sales a/c 5000
(Being goods sold to mandy)
24th June Cash a/c 7125
Discount allowed a/c 375
To Claire a/c 7500
(Payment given by Claire)
25th june Cash a/c 8550
To Hywel a/c 8550
(Payment given to Hywel a/c)
Georgina 12000
To Cash 11160
To discount
received 840
(Payment given to Georgina)
27th june Andrew a/c 4500
17

To received
Discount 90
To cash 4410
Ledger account
Sales A/c
date Particular (£) amount date Particular (£) amount
30th june To Trading a/c 28050 2nd june By Claire 8500
14th june By Hywel 8550
20th june By cash 6000
24th june By Mandy 5000
28050 28050
Purchase A/c
date Particular (£) amount date Particular (£) amount
13th june To Georgina 12000 30th june By Trading a/c 16500
21st june To Andrew 4500
16500 16500
Claire A/c
date Particular (£) amount Particular Amount
2nd june To sale 8500 By Cash 7125
By discount allowed 375
8500 8500
Georgina A/c
date Particular (£) amount date Particular (£) amount
25th june To Cash 11160 13th june By Purchase 12000
To Discount
received 840
18

12000 12000
Hywel A/c
date Particular (£) amount date Particular (£) amount
14th june To sales 8550 25th june By cash a/c 8550
8550 8550
Andrew A/c
date Particular (£) amount date Particular (£) amount
27th june To Cash 4410 21st june By Purchase a/c 4500
To Discount
received 90
4500 4500
Cash A/c
date Particular (£) amount date Particular (£) amount
20th june To sales 6000 25th june By Georgian 11160
14th june To Hywel 8550 27th june By Andrew 4410
24th june To claire a/c 7125 30th june By Balance c/d 6105
21675 21675
Sales return A/c
date Particular (£) amount date Particular (£) amount
22nd june To claire a/c 1000 30th june By Trading a/c 1000
1000 1000
Mandy A/c
date Particular (£) amount date Particular (£) amount
24/06/18 To sales 5000 30/06/18 By Balance c/d 5000
5000 5000
Discount allowed A/c
19