Recording Business: Transactions, Journal, Ledger, Trial Balance, Income Statement, Balance Sheet, Ratios

RECORDING BUSINESS

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
PART A...........................................................................................................................................3
JOURNAL...................................................................................................................................3
LEDGER......................................................................................................................................5
Trial balance as at 31 October 2020............................................................................................8
Income statement for the year ending 31st October 2020...........................................................9
Balance Sheet as at 31st October 2020........................................................................................9
Explaining what drawings are concerning small businesses.....................................................10
PART B..........................................................................................................................................10
Calculation of ratios...................................................................................................................10
Comparison of performance between the Linda's business and her competitor by analysing the
ratios...........................................................................................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES................................................................................................................................1

INTRODUCTION
The report titled as “recording Business” will be prepared to record various monetary
transactions arises during business activity. The report will depict the snapshot of Linda's newly
established business by recording transaction pertaining to the month of October. Business
transactions of her business will be firstly recorded in journal book, then it will be posted in
ledger book, after that in order to check numerical accuracy all ledger accounts are compiled into
one account that is, trial balance and then to know the profit earning ability of the business profit
and loss account will be prepared and financial balance sheet will show the financial health of
the business. In order to know the market position of Linda's business, with the help of ratio
analysis her performance will be compared with her competitors performance.
MAIN BODY
PART A
JOURNAL
Date Particulars Debit£ Credit£
01/10/20 Bank Account 8000
Cash Account 5200
Van Account 3000
To Capital Account
(Being business started with
bank, cash and van) 16200
02/10/20 Laptop Account 1000
To Bank Account
(Being laptop purchased for
business) 1000
04/10/20 Purchase Account 2450
To Toys Ltd. Account
(Being goods purchased on
credit) 2450
05/10/20 Bank Account 1500

To Sales Account
(Being goods sold for cash) 1500
12/10/20 Repairs Account 80
To Cash Account
(Being laptop repaired and paid
in cash) 80
18/10/20 Toys Ltd. Account 100
To Purchase Account
(Being goods returned to Toys
Ltd.) 100
21/10/20 Bank Account 500
To Rent recieved account
(Being rent received for
premises) 500
23/10/20 Cash Account 1500
Fred Account 400
To Sales Account
(Being goods sold partly in cash
and partly on credit) 1900
23/10/20 Cash Account 500
To Sales Account
(Being Goods sold for cash) 500
24/10/20 Second-hand Car account 2500
To Bank Account
(Being second-hand car
purchased in auction) 2500
26/10/20 Wages Account 820
To Bank Account
(Being wages paid to shopkeeper) 820
30/10/20 Rent account 1000
To Bank Account 1000