Recording Business Transaction

RECORDING BUSINESS
TRANSACTION

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY .................................................................................................................................3
Part A...............................................................................................................................................3
a). Journal Entries ......................................................................................................................3
b) Ledger accounts......................................................................................................................4
c) Trial balance sheet as on 31st Oct 2020..................................................................................8
d)Income statement for the year ended 31st Oct 2020................................................................8
e) balance sheet as on 31st Oct 2020 .........................................................................................9
f) Letter to Linda.........................................................................................................................9
Part B.............................................................................................................................................10
1.Calculation of ratios of Linda's business................................................................................10
2. Comparison of Linda's business ratios with competitors ratios............................................10
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15
APPENDIX ...................................................................................................................................16
1.................................................................................................................................................16

INTRODUCTION
Financial accounting helps business to record each transaction in summarize
way. It assists the management of company to analyse its financial position with
help of those summarized data. The present report shows the journal entry of Linda
business. It also provides ledger, trial balance, income statement and balance sheet,
which is useful for firm for calculating ratios. Ratio provides assistance in decision
making. The reports represent the net profit, gross profit, current ratio, acid test
ratio, account receivable and payable ratio. These ratios can help Lind's Business
to compare its performance with competitors.
MAIN BODY
Part A
a). Journal Entries
Date Particulars L.F Debit Credit
01/10/20 Bank A/C 8000
Cash A/C 5200
Van A/C 3000
To Capital A/C 16200
(Being Capital introduced)
02/10/20 Laptop A/C 1000
To Bank A/C 1000
(Being Laptop bought)
04/10/20 Purchase A/C 2450
To Toy Ltd. A/C 2450
(Being toys are purchased on credit)

05/10/20 Bank A/C 1500
To sales A/C 1500
(being goods sold)
12/10/20 Repairs A/C 80
To Cash A/C 80
(Being laptop is repaired )
18/10/20 Toy Ltd. A/C 100
To purchase return 100
(Being goods returned to toys Ltd)
21/10/20 Bank A/C 500
To Rent A/C 500
(Being rent received)
23/10/20 Cash A/C 1500
Fred A/C 400
To sales A/C 1900
(Being Goods sold on cash and credit it
partly)
23/10/20 Cash A/C 500
To sales A/C 500
(Being goods sold to David)
24/10/20 Second hand car A/C 2500
To Bank A/C 2500
(Being car purchased by issuing cheque)
26/10/20 Wages A/C 820