Recording Business Transactions: Double Entry, Trial Balance, Income Statement, and Financial Position

Recording Business
transaction

Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................1
PART A...........................................................................................................................................1
a) Write double entry record the transactions in T-accounts.......................................................1
b) Balance the accounts and bring down an opening balance.....................................................2
c) Extract a Trial balance as at 31st October 2021......................................................................5
d) Prepare an Income Statement for the period ended 31st October 2021..................................6
e) Prepare a Statement of Financial Position as at 31st October 2021........................................7
f) Write a brief letter to Anne explaining what drawings are concerning small business and
answering her query concerning her holiday...............................................................................8
PART B...........................................................................................................................................8
a) According to the information available in Income and Financial position statements in Part
A, calculate the following ratios for Anne’s business for October 2021.....................................8
b) Assuming Anne’s competitor’s ratio averages are as stated above for month October of
years 2019, 2020 and 2021: Analyse her performance with reference to the ratios of October
2021 calculated in comparison to those of her competitor. Also, briefly explain the impact of
Covid -19 outbreak on the average ratios..................................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
A commercial operations is an organisation's fiscal status that reflects the firm‘s
sustainability (Carlson and Koch, 2018). It also creates accounting data in concerning the
financial reporting. There is also a look at the firm's evaluation depending on the evidence
collected for it.
PART A
a) Write double entry record the transactions in T-accounts
JOURNAL ENTRIES
Date Particulars Debit Credit
01/10/21 Bank
Cash
Flat
Car
Capital
10000
4800
45000
12000
71800
02/10/21 Purchases
Home Ltd
5400
5400
04/10/21 Computer
Printer
Bank
800
200
1000
05/10/21 Bank
Sales
2800
2800
12/10/21 Repair Expense
Cash
110
110
18/10/21 Home Ltd.
Purchases
250
250
21/10/21 Bank
Rent Income
800
800

23/10/21 Rayan
Cash
Sales
300
1800
2100
23/10/21 Cash
Sales
700 700
24/10/21 Laptop
Bank
1700
1700
26/10/21 Wages
Bank
820
820
30/10/21 Rent Expenses
Bank
850
850
31/10/21 Drawings
Bank
1200
1200
31/10/21 Cash
Rayan
150
150
b) Balance the accounts and bring down an opening balance
Bank
Date Particulars Ref Amount Date Particulars Ref Amount
01/10/21 Capital 10000 04/10/21 Computer 800
21/10/21 Rent 800 04/10/21 Printer 200
05/10/21 Sales 2800 24/10/21 Laptop 1700
26/10/21 Wages 820
30/10/21 Rent 850
31/10/21 Drawings 1200
31/10/21 Balance c/d 8030
13600 13600
Cash