Recording Business Transactions : pdf

Added on - 17 Feb 2021

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RECORDING BUSINESSTRANSACTION
Table of ContentsINTRODUCTION...........................................................................................................................3PART A...........................................................................................................................................3(a) Journal Entries of Mel...........................................................................................................3(b) General Ledger of Mel..........................................................................................................5(c) Trial Balance of Mel..............................................................................................................7(d) Income Statement of Mel......................................................................................................8(e) Statement of Financial Position of Mel.................................................................................8PART B............................................................................................................................................9Ratios calculation for Mel :.........................................................................................................9Systematic comparison of various ratios of Mel with competitors average:............................10CONCLUSION..............................................................................................................................11
INTRODUCTIONRecording business transaction is first step of financial accounting, in which financialtransactions are recorded by business organisation to formulate financial statement. Recording ofbusiness entry is not only recording of entries in journal but also classification of suchaccounting transaction and preparing ledgers and trail balance (Hall, 2012). Ultimate objective ofrecording business transactions to provide a framework for decision-making. It is basic core ofwhole accounting process. By recording transaction and preparation of financial statement it iseasy to conduct ratio analysis because it provides data for ratio calculation. This report exhibitsrecording of transaction in journal, posting them to ledgers, preparation of trial balance, P&L a/cand balance sheet. It also provide a comparative analysis through different ratios.PART A(a) Journal Entries of MelDateParticularsDebit ()Credit ()01/09/17Bank A/c Dr5000Cash A/c Dr900To Capital A/c3800(being business started with cash balance of800 andbank balance of3000 )02/09/17Purchase A/c Dr900To Bill A/c900(being goods purchase in credit from Bill amounting of900 )03/09/17Furniture A/c Dr600To Bank A/c600(being furniture amounting of600 purchased throughcheque)05/09/17Cash A/c Dr1100To Sales A/c1100(being goods sold amounting of500 and receivedmoney in bank)06/09/17Purchase A/c Dr400To Cash A/c400(being goods purchase amounting of400 in cashfrom Turnbull)
10/09/17Rent Paid A/c Dr400To Cash A/c400(being rent amounting of400 paid in cash)12/09/17Stationery A/c Dr200To Bank A/c200(being stationery amounting of200 purchase throughcheque )18/09/17Bill A/c Dr.500To Bank A/c500(being amount paid to Bill for previous due500 frombank )21/09/17Purchase A/c Dr100To Bill A/c100(being goods purchase in credit from Bill amounting of100 )23/09/17Till A/c Dr400To Sales A/c400(Being goods amounting of400 sold to Till on credit)23/09/17Cash A/c Dr1000Rob Dr500To Sales A/c1500(Being goods amounting of1500 sold to Rob andonly 1000 received in cash)24/09/17Car A/c Dr1500To Bank A/c1500(being car amounting of1500 purchase in cheque forbusiness use)30/09/17Wages A/c Dr800To Cash A/c800(being wages amounting of800 paid in cash)30/09/17Capital A/c Dr400To Cash A/c400(being cash amounting of550 withdraw by Jill incash)30/09/17Office Computer A/c Dr400To Cash A/c400
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