Recording Business Transaction - Assignment
12 Pages3559 Words460 Views
Added on 2020-12-18
Recording Business Transaction - Assignment
Added on 2020-12-18
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RECORDING BUSINESSTRANSACTION
Table of ContentsINTRODUCTION...........................................................................................................................1PART A...........................................................................................................................................1(a) Journal Entries of Jill.............................................................................................................1(b) General Ledger of Jill............................................................................................................2(c) Trial Balance of Jill...............................................................................................................5(d) Income Statement of Jill........................................................................................................6(e) Statement of Financial Position of Jill...................................................................................6PART B............................................................................................................................................7Calculations of ratios of Jill :......................................................................................................7Comparison of various ratios of Jill with competitors average:.................................................8CONCLUSION................................................................................................................................9REFERENCES..............................................................................................................................10
INTRODUCTIONRecording of business transaction means entering a transaction and providing achronological record of business activities (Veblen, 2017). Recording of business transactionfirstly include recording of journal entries, then ledgers are prepared from the journal entries byopening the accounts, then all the closing balances of the ledgers are transferred to trial balance,which is used in preparation of statement of income and statement of financial positions. Fromthe statement of income and financial position, various ratios like net profit margin, gross profitmargin, current ratio, acid test etc. are calculated for better understanding of financial statementsof the entity. PART A(a) Journal Entries of JillDateParticularsDebit (￡)Credit (￡)01/09/17Bank A/c Dr3000Cash A/c Dr800 To Capital A/c3800(being business started with cash balance of ￡ 800 and bank balance of ￡3000 )02/09/17Purchase A/c Dr900 To Ron A/c900(being goods purchase in credit from Ron amounting of￡900 )03/09/17Computer A/c Dr800 To Bank A/c800(being computer amounting of ￡800 purchased throughcheque)05/09/17Bank A/c Dr500 To Sales A/c500(being goods sold amounting of ￡ 500 and received money in bank)06/09/17Purchase A/c Dr400 To Cash A/c400(being goods purchase amounting of ￡400 in cash from C Jones)1
10/09/17Rent Paid A/c Dr300 To Bank A/c300(being rent amounting of ￡300 paid through cheque)12/09/17Stationery A/c Dr100 To Cash A/c100(being stationery amounting of ￡100 purchase in cash )18/09/17Ron A/c Dr100 To Purchase Return A/c100(being goods amounting of ￡ 100 returned to Ron which was purchased on 02/09/2017)21/09/17Bank A/c Dr100 To Rent Received A/c100(being rent amounting of ￡ 100 received of let off part of premises)23/09/17Bill A/c Dr400 To Sales A/c400(Being goods amounting of ￡400 sold to Bill on credit)23/09/17Cash A/c Dr1500 To Sales A/c1500(Being goods amounting of ￡ 1500 sold in cash)24/09/17Car A/c Dr900 To Bank A/c900(being car amounting of ￡900 purchase in cheque for business use)30/09/17Wages A/c Dr400 To Cash A/c400(being wages amounting of ￡ 400 paid in cash)30/09/17Capital A/c Dr550 To Cash A/c550(being cash amounting of ￡550 withdraw by Jill in cash)(b) General Ledger of JillCapital A/c2
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