Recording Business Transaction: Journal Entries, Balance Sheets, and Ratio Analysis

Recording
Business
Transaction

Table of Contents
INTRODUCTION...........................................................................................................................1
PART A...........................................................................................................................................1
Journal transactions of T- accounts:............................................................................................1
Balance the accounts and an opening balances:..........................................................................2
Trial balance:...............................................................................................................................8
Income statement for the period 31st Oct. 2020:.........................................................................8
Preparation of financial position 31st Oct. 2020:........................................................................8
PART B............................................................................................................................................9
Ratio calculation for Linda's business:........................................................................................9
Analysis of ratio analysis in comparison to its competitors:.....................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business transactions is the process which includes transactions for goods. Money,
services for various parties for the business. It includes various transactions which business uses
for its activities. It is about recording those transactions which the business runs for its activities
which helps its for higher profitability. Company's records its transactions for its decision
making which helps for better performance which helps for higher profitability. It is about
managing activities which helps managers for decision making. Businesses which are use
accounting methods for recording its activities it will helps it for managing financial system for
the business (Adamyk, 2017). For example, the company purchases building it is the transactions
for the business. This report is bases for recording business transactions which helps company's
for better decision making which helps for higher profitability for the businesses. This report
includes topics which are journal, ledger and trial balance. Apart from this it includes topics
which are cash account and ratio analysis in comparison for competitors for the businesses.
PART A
Journal transactions of T- accounts:
JOURNAL ENTRIES
S.NO Date Particulars L.F £ £
2020
1 01/10/20 Cash A/c Dr. 5200
Bank A/c Dr. 8000
Van A/c Dr. 3000
To Capital A/c 16200
(Capital invested into business)
2 02/10/20 Laptop A/c Dr. 1000
To Bank A/c 1000
( Purchased laptop by cheque)
3 04/10/20 Purchase A/c Dr. 2450
1

To Toys LTD. A/c 2450
(Goods purchased on Credit basis)
4 05/10/20 Bank A/c Dr. 1500
To Sales A/c 1500
(Goods sold by cheque)
5 12/10/20 Repair A/c Dr. 80
To Cash A/c 80
(Laptop Repair with cash)
6 18/10/20
Toys LTD. A/c
Dr. 100
To Purchase Return A/c 100
(Goods Return)
7 21/10/20 Bank A/c Dr. 500
To rent A/c 500
(Rent received)
8 23/10/20 Fred A/c Dr. 400
Cash A/c Dr. 1500
To Sales A/c 1900
(Goods sold)
9 23/10/20 Cash A/c Dr. 500
To Sales A/c 500
(Goods sold)
10 24/10/20
Car A/c
Dr. 2500
2