Recording Business Transactions

Recording business
transactions

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
PART A...........................................................................................................................................3
(a) Journal entries for the year ended 31st October 2020............................................................3
(b) Ledger accounts for the year ended 31st October 2020.........................................................4
(c) Trial balance as at 31st October 2020....................................................................................8
(d) Income statement for the year ended 31st October 2020.......................................................9
(e) Balance Lindaet as at 31st October 2020.............................................................................10
(f) Drawings concept in accounting...........................................................................................11
PART B..........................................................................................................................................11
(i) Ratio Analysis.......................................................................................................................11
(ii) Analysis of Linda’s performance in contrast with competitor’s performance through ratio
averages......................................................................................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES................................................................................................................................1

INTRODUCTION
Preparing financial statement as per the financial reporting framework is the primary role
of the accounts department. This report will show the journal entries, ledger accounts, trial
balance, income statement and financial position of Linda's business. This report will also state
the different ratio analysis and the impact of drawings in the financial statement.
MAIN BODY
PART A
(a) Journal entries for the year ended 31st October 2020
Date Particulars Debit(£) Credit(£)
01/10/20 Bank account
Cash account
Van account
To Capital account
(Being business started with cash, bank and van)
8000
5200
3000
16200
02/10/20 Laptop account
To bank account
(Being laptop bought from local shop)
1000
1000
04/10/20 Purchase account
To toys ltd. Account
(Being goods purchase from creditors)
2450
2450
05/10/20 Bank account
To sales account
(Being goods sold and received payment through
cheques)
1500
1500
12/10/20 Repairing expense account
To cash account
(Being cash paid against repairing laptop)
80
80
18/10/20 Toys ltd. Account 100

To purchase returned
(Being purchased goods returned to creditors)
100
21/10/20 Bank account
To rent income
(Being rent received through bank)
500
500
23/10/20 Cash account
Fred account
To sales account
(Being goods sold to debtors and received part
payment in cash)
1500
400
1900
23/10/20 Cash account
To sales account
(Being received payment against goods sale)
500
500
24/10/20 Second-hand car account
To bank account
(Being bought second-hand car for business use)
2500
2500
26/10/20 Monthly wages account
To bank account
(Being wages paid to part-time shopkeeper)
820
820
30/10/20 Rent expenses account
To bank account
(Being rent expenses paid via cheques)
1000
1000
31/10/20 Drawing Account
To bank account
(Being drawing made by Linda from Business
account)
1600
1600
Total 30150 30150