Recording Business Transactions

Recording business
transactions
(Assessment 2)

Table of Contents
Table of Contents.............................................................................................................................2
INTRODUCTION...........................................................................................................................1
PART A...........................................................................................................................................1
a. Double entry to record transactions.........................................................................................1
b. Balance of accounts in ledger..................................................................................................2
c. Trial balance.............................................................................................................................6
d. Income statement.....................................................................................................................6
e. Statement of financial position................................................................................................6
f. Letter to Linda..........................................................................................................................7
PART B...........................................................................................................................................7
i. Calculation of Ratios for Linda................................................................................................7
ii. Comparison of Linda’s performance with competitor............................................................8
CONCLUSION................................................................................................................................9
REFRENCES.................................................................................................................................10

INTRODUCTION
Recording business transaction is the process of keeping track record of all the
transactions that are made by the organisation during the year. It is very important for all the
businesses to make sure that they are recording all their transactions as it can help to analyse
actual business position (Dai and Vasarhelyi, 2017). Present report is based upon Linda’s
business. This assignment covers various topics such as journals, ledgers, trial balance, final
accounts etc. Apart from this, different ratios are also calculated for the purpose of determining
actual position of business.
PART A
a. Double entry to record transactions
Journal Entries
S. NO Date Particulars L.F £ £
1 01/02/20 purchase return A/C Dr. 350
To Purchase A/c 350
( Being purchase return with full
settlement)
2 04/02/20 Bad debts A/c Dr. 85
To S. keys A/c 85
(being debt debt written off by S.
keys)
3 09/02/20 Machinery A/c DR. 2300
To Bank 200
To TS CO. 2100
( Being machinery purchase with
cash Rs. 200 and 2100 on credit)
4 13/02/20 Cash account 220
Bad debts A/c 50
1