Recording Business Transactions - Doc
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Added on 2021-01-02
Recording Business Transactions - Doc
Added on 2021-01-02
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RECORDING BUSINESS
TRANSACTION
TRANSACTION
Table of Contents
INTRODUCTION...........................................................................................................................3
PART 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.................................................................................8
PART B............................................................................................................................................9
Ratios calculation for Mel :.........................................................................................................9
Systematic comparison of various ratios of Mel with competitors average:............................10
CONCLUSION..............................................................................................................................11
INTRODUCTION...........................................................................................................................3
PART 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.................................................................................8
PART B............................................................................................................................................9
Ratios calculation for Mel :.........................................................................................................9
Systematic comparison of various ratios of Mel with competitors average:............................10
CONCLUSION..............................................................................................................................11
INTRODUCTION
Recording business transaction is first step of financial accounting, in which financial
transactions are recorded by business organisation to formulate financial statement. Recording of
business entry is not only recording of entries in journal but also classification of such
accounting transaction and preparing ledgers and trail balance (Hall, 2012). Ultimate objective of
recording business transactions to provide a framework for decision-making. It is basic core of
whole accounting process. By recording transaction and preparation of financial statement it is
easy to conduct ratio analysis because it provides data for ratio calculation. This report exhibits
recording of transaction in journal, posting them to ledgers, preparation of trial balance, P&L a/c
and balance sheet. It also provide a comparative analysis through different ratios.
PART A
(a) Journal Entries of Mel
Date Particulars Debit (£) Credit (£)
01/09/17 Bank A/c Dr 5000
Cash A/c Dr 900
To Capital A/c 3800
(being business started with cash balance of £ 800 and
bank balance of £3000 )
02/09/17 Purchase A/c Dr 900
To Bill A/c 900
(being goods purchase in credit from Bill amounting of
£900 )
03/09/17 Furniture A/c Dr 600
To Bank A/c 600
(being furniture amounting of £600 purchased through
cheque)
05/09/17 Cash A/c Dr 1100
To Sales A/c 1100
(being goods sold amounting of £ 500 and received
money in bank)
06/09/17 Purchase A/c Dr 400
To Cash A/c 400
(being goods purchase amounting of £400 in cash
from Turnbull)
Recording business transaction is first step of financial accounting, in which financial
transactions are recorded by business organisation to formulate financial statement. Recording of
business entry is not only recording of entries in journal but also classification of such
accounting transaction and preparing ledgers and trail balance (Hall, 2012). Ultimate objective of
recording business transactions to provide a framework for decision-making. It is basic core of
whole accounting process. By recording transaction and preparation of financial statement it is
easy to conduct ratio analysis because it provides data for ratio calculation. This report exhibits
recording of transaction in journal, posting them to ledgers, preparation of trial balance, P&L a/c
and balance sheet. It also provide a comparative analysis through different ratios.
PART A
(a) Journal Entries of Mel
Date Particulars Debit (£) Credit (£)
01/09/17 Bank A/c Dr 5000
Cash A/c Dr 900
To Capital A/c 3800
(being business started with cash balance of £ 800 and
bank balance of £3000 )
02/09/17 Purchase A/c Dr 900
To Bill A/c 900
(being goods purchase in credit from Bill amounting of
£900 )
03/09/17 Furniture A/c Dr 600
To Bank A/c 600
(being furniture amounting of £600 purchased through
cheque)
05/09/17 Cash A/c Dr 1100
To Sales A/c 1100
(being goods sold amounting of £ 500 and received
money in bank)
06/09/17 Purchase A/c Dr 400
To Cash A/c 400
(being goods purchase amounting of £400 in cash
from Turnbull)
10/09/17 Rent Paid A/c Dr 400
To Cash A/c 400
(being rent amounting of £400 paid in cash)
12/09/17 Stationery A/c Dr 200
To Bank A/c 200
(being stationery amounting of £200 purchase
through cheque )
18/09/17 Bill A/c Dr. 500
To Bank A/c 500
(being amount paid to Bill for previous due£500 from
bank )
21/09/17 Purchase A/c Dr 100
To Bill A/c 100
(being goods purchase in credit from Bill amounting of
£100 )
23/09/17 Till A/c Dr 400
To Sales A/c 400
(Being goods amounting of £400 sold to Till on credit)
23/09/17 Cash A/c Dr 1000
Rob Dr 500
To Sales A/c 1500
(Being goods amounting of £ 1500 sold to Rob and
only 1000 received in cash)
24/09/17 Car A/c Dr 1500
To Bank A/c 1500
(being car amounting of £1500 purchase in cheque for
business use)
30/09/17 Wages A/c Dr 800
To Cash A/c 800
(being wages amounting of £ 800 paid in cash)
30/09/17 Capital A/c Dr 400
To Cash A/c 400
(being cash amounting of £550 withdraw by Jill in
cash)
30/09/17 Office Computer A/c Dr 400
To Cash A/c 400
To Cash A/c 400
(being rent amounting of £400 paid in cash)
12/09/17 Stationery A/c Dr 200
To Bank A/c 200
(being stationery amounting of £200 purchase
through cheque )
18/09/17 Bill A/c Dr. 500
To Bank A/c 500
(being amount paid to Bill for previous due£500 from
bank )
21/09/17 Purchase A/c Dr 100
To Bill A/c 100
(being goods purchase in credit from Bill amounting of
£100 )
23/09/17 Till A/c Dr 400
To Sales A/c 400
(Being goods amounting of £400 sold to Till on credit)
23/09/17 Cash A/c Dr 1000
Rob Dr 500
To Sales A/c 1500
(Being goods amounting of £ 1500 sold to Rob and
only 1000 received in cash)
24/09/17 Car A/c Dr 1500
To Bank A/c 1500
(being car amounting of £1500 purchase in cheque for
business use)
30/09/17 Wages A/c Dr 800
To Cash A/c 800
(being wages amounting of £ 800 paid in cash)
30/09/17 Capital A/c Dr 400
To Cash A/c 400
(being cash amounting of £550 withdraw by Jill in
cash)
30/09/17 Office Computer A/c Dr 400
To Cash A/c 400
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