Recording Business Transaction

Recording Business
Transaction

Table of Contents
INTRODUCTION...........................................................................................................................1
PART A...........................................................................................................................................1
(a) Transactions are recorded in double entry system ................................................................1
b) Ledger accounts......................................................................................................................3
c) Develop a Trial Balance..........................................................................................................6
d) Profit & loss statement............................................................................................................7
e) Balance Sheet..........................................................................................................................8
f) ....Write a brief letter to Linda................................................................................................8
PART B............................................................................................................................................9
....Ratio calculations...................................................................................................................9
.....Linda's competitors ratio.......................................................................................................9
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Transactions are first recorded in the accounting books of company then on the ledger
system. It is multi step procedure in which firstly analysis all the transaction that measure in cash
then decided what accounts will be affected. In the second step all the transactions categorised as
per the nature of transaction (Angelis and da Silva, 2019). An accounting system helps a
business to interpret business activities into usable financial records. All the financial
transactions are using to analysis its profitability and determine business activity that helps to
take investment decision. This report based on the different business transactions that recorded
by the organisations in different financial statements like journal entries, Profit & loss statement,
Balance sheet, ledger accounts. In this report cover various financial transactions that are
recorded into Trial balance and financial statements.
PART A
(a) Transactions are recorded in double entry system ..............
A journal entry is a record of business activities that occur in financial period and
measure in money. In this document covers a particular date of transaction, items will be affected
debit and credit, narration of the transaction and a unique reference number. It is known as first
step of accounting cycle. Every financial transaction affect at least two accounts, one is debited
and second is credited (Tong, Tao and Lifset, 2018).
Date Particulars
L.
F Debit Amount Credit Amount
2020
01/10/20 ......Bank A/c Dr...... 8000
......Cash A/c Dr...... 5200
......Van A/c Dr...... 3000
......To Capital A/c 16200
(Being business started)
1

02/10/20 ......Laptop A/c Dr...... 1000
......To Bank A/c 1000
(Being laptop purchased)
04/10/20 ......Purchase A/c Dr...... 2450
......To Toy Ltd 2450
(Being purchase made)
05/10/20 ......Bank A/c Dr...... 1500
......To Sales A/c 1500
(Being sales made)
12/10/20 ......Repairs A/c Dr...... 80
......To Cash A/c 80
(Being cash paid for repairs)
18/10/20 ......Toy Ltd A/c Dr...... 100
......To Purchase Return A/c 100
(Being purchase return made)
21/10/20 ......Bank A/c Dr...... 500
......To Rent A/c 500
(Being rent received)
2