Recording Business Transaction: Analysis of Income Statements and Financial Position

Recording business
transaction

Table of Contents
INTRODUCTION...........................................................................................................................3
PART A...........................................................................................................................................3
a. Writing down double entry record transaction in T- accounts.................................................3
b. Determining the accounts and bring down an opening balance account.................................5
c. Prepare Trial balance as at 31st October 2020.........................................................................8
d. Analysing Income statements for the period ended 31st October 2020..................................9
e. Evaluating statements of financial position as at 31st October 2020.....................................10
f. Letter to Linda explaining what drawings are concerning small business and answering her
query about holiday....................................................................................................................11
PART B..........................................................................................................................................11
Calculation of ratio....................................................................................................................11
Linda' s competitors ratio average were as follows: Analysing performance to each of the
ratios calculated with the comparison of her competitors.........................................................12
CONCLUSION..............................................................................................................................13
REFERENCES................................................................................................................................1

INTRODUCTION
Recording business transaction refers to the part of process that is part of accounting
process using accounting books and other transaction books and need to be recorded timely and
accurately (Chow and Schoenbaum, 2020). All the transaction were need in monetary terms and
based on double entry accounting system in which every transaction is recorded twice manner of
ledger. All the accounts are very different from each other and has different nature and
accordingly treated to record in journal and ledger entry. There is always been a perfect match
between two sides. In this report based on different business transaction and has to be identified
and will be need to evaluate systematically. All transaction are recorded in accounting books as
per the rules and along with prepare financial statements to determine position of performance.
Apart from proper calculation of financial ratios and their efficiency in monetary terms is being
compare of industry ratio.
PART A
a. Writing down double entry record transaction in T- accounts
Date Particulars....
L.
F
Debit
Amount
Credit
Amount
2020
01/10/20 Bank A/c Dr 8000.00
Cash A/c Dr 5200.00
Van A/c Dr 3000.00
To Capital A/c 16200.00
(Being business started)
02/10/20 Laptop A/c Dr 1000.00
To Bank A/c 1000.00

(Being laptop purchased)
04/10/20 Purchase A/c Dr 2450.00
To Toy Ltd 2450.00
(Being purchase made)
05/10/20 Bank A/c Dr 1500.00
To Sales A/c 1500.00
(Being sales made)
12/10/20 Repairs A/c Dr 80.00
To Cash A/c 80.00
(Being cash paid for
repairs)
18/10/20 Toy Ltd A/c Dr 100.00
To Purchase Return
A/c 100.00
(Being purchase return
made)
21/10/20 Bank A/c Dr 500.00
To Rent A/c 500.00
(Being rent received)