Recording Business Transaction

RECORDING BUSINESS
TRANSACTION

Table of Contents
INTRODUCTION...........................................................................................................................3
Part A...............................................................................................................................................3
Journal entry ................................................................................................................................3
Trial balance as at 31 October 2020............................................................................................8
Income statement for the year ending 31st October 2020...........................................................9
Statement of Financial position as at 31st October 2020.............................................................9
Brief letter to Linda....................................................................................................................10
Part B.............................................................................................................................................11
Ratio valuation ..........................................................................................................................11
Performance assessment in context to ratio...............................................................................12
CONCLUSION .............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Recording business transaction refer as reporting the business activities of the
organisation. This project is about to record the transaction of business entity in general ledger of
accounting books. Case study over Linda is taken to deliver this project. Income statement will
be prepared to know the profitability of the entity. Financial position will also reflect with
support of statements of accounts. Brief letter will also be given to Linda that reflect the drawing
situation of business. Furthermore, project will discuss the financial position of the entity by
comparing with the industry average. Ratio analysis will be done to conduct the performance
assessment of business entity based on the industry average.
Part A
Journal entry
Date Particulars Debit Credit
01/10/20 Bank a/c Dr. 8000
Cash a/c Dr. 5200
Van a/c Dr. 3000
To Capital a/c
(Business started with bank, cash
and van) 16200
02/10/20 Laptop a/c Dr. 1000
To Bank a/c
(Laptop purchased paid through
bank) 1000
04/10/20 Purchase a/c Dr. 2450
To Toys Ltd. A/c
(Goods purchased on credit) 2450
05/10/20 Bank a/c Dr. 1500
To Sales a/c
(Goods sold for cash) 1500
12/10/20 Repairs a/c Dr. 80
To Cash a/c
(Laptop repaired and paid in
80

cash)
18/10/20 Toys Ltd. A/c Dr. 100
To Purchase a/c
(Goods returned to Toys Ltd.) 100
21/10/20 Bank a/c Dr. 500
To Rent recieved a/c
(Rent received in Bank) 500
23/10/20 Cash a/c Dr. 1500
Fred a/c Dr. 400
To Sales a/c
(Goods sold partly in cash and
partly on credit) 1900
23/10/20 Cash a/c Dr. 500
To Sales a/c
(Goods sold for cash) 500
24/10/20 Second-hand Car a/c Dr. 2500
To Bank a/c
(Second-hand car purchase and
payment was made in bank) 2500
26/10/20 Wages a/c Dr. 820
To Bank a/c
(Wages was paid by bank) 820
30/10/20 Rent a/c Dr. 1000
To Bank a/c
(Rent paid with bank) 1000
31/10/20 **Drawings a/c Dr. 1600
To Bank a/c
(Drawings made out of business
bank account) 1600
Total 30150 30150
Ledger