Recording Business Transaction

RECORDING BUSINESS
TRANSACTION

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
PART A...........................................................................................................................................3
Journal..........................................................................................................................................3
Ledger..........................................................................................................................................4
Trial balance as at 31st October 2020..........................................................................................8
Statement for Profit and Loss Account for the period ended 31st October 2020........................9
Balance sheet as at 31st October 2020.........................................................................................9
Drawings concerning small business.........................................................................................10
PART B..........................................................................................................................................10
Ratio estimation.........................................................................................................................10
Comparative evaluation of performance of the businesses........................................................12
CONCLUSION..............................................................................................................................12
REFERENCES................................................................................................................................1

INTRODUCTION
Financial statement shows the financial position of the company and the proper recording
of transaction is the basic requirement in order to prepare FS. This report will help us to
understand how proper recording of business transaction by following double entry system help
owner to analyse the performance of the business. In this report we will also calculate the
different ratios by taking the figures from income statement. In this report we also analyse
performance of Linda's business with her competitors by analysing the ratios.
MAIN BODY
PART A
Journal
Date Particular Debit(£) Credit(£)
01/10/20 Bank a/c
Cash a/c
Van a/c
To capital a/c
(Being business started)
8000
5200
3000
16200
02/10/20 Laptop a/c
To bank a/c
(Being laptop bought)
1000
1000
04/10/20 Purchase a/c
To toys limited a/c
(Being stock purchase)
2450
2450
05/10/20 Bank a/c
To sales a/c
(Being goods sold and received payment
through cheques)
1500
1500
12/10/20 Repairing expense a/c
To cash a/c
80
80

(Being repairing expenses paid by cash)
18/10/20 Toys ltd. a/c
To purchase return a/c
(Being returned goods to toys ltd.)
100
100
21/10/20 Bank a/c
To rent income
(Being rent received through cheque)
500
500
23/10/20 Cash a/c
Fred a/c
To sales a/c
(Being sold goods on cash as well credit)
1500
400
1900
23/10/20 Cash a/c
To sales a/c
(Being sold goods on cash)
500
500
24/10/20 Second hand car a/c
To bank
(Being bought second hand car)
2500
2500
26/20/20 Wages a/c
To bank a/c
(Being wages paid through cheques)
820
820
30/10/20 Rent a/c
To bank a/c
(Being rent paid through cheques)
1000
1000
31/10/20 Drawings a/c
To bank a/c
(Being holiday expenses of linda is drawings
from the business)
1600
1600
TOTAL 30150 30150