Business Accounting: Journals, Ledgers, and Financial Statements

This document provides a comprehensive overview of fundamental accounting principles and practices. It details the process of recording financial transactions in journals, posting them to ledgers, and extracting trial balances. The assignment further demonstrates the creation of key financial statements, including the profit and loss account and the balance sheet, using the trial balance data. The content covers various accounting tasks across multiple scenarios, including the differences between capital and revenue expenditures, providing a practical understanding of accounting procedures. This assignment is a valuable resource for students learning the core concepts of accounting and financial statement analysis, offering practical examples and detailed explanations of each step involved in the accounting cycle.

Business Management

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Journal, posting of the journal in ledger, extracting trial balance from the journal and
making the financial statements that is profit and loss account and the balance sheet...............1
TASK 2............................................................................................................................................4
P2 Journal, posting of the journal in ledger, extracting trial balance from the ledger and
making the financial statements that is profit and loss account and the balance sheet...............4
TASK 3............................................................................................................................................7
P3 Journal, posting of the journal in ledger, extracting trial balance from the ledger accounts
and making the financial statements that is profit and loss account and the balance sheet........7
TASK 4..........................................................................................................................................11
P4 Journal, posting of the journal in ledger, extracting trial balance from the ledger accounts
...................................................................................................................................................11
TASK 5..........................................................................................................................................13
P5 Difference between the capital expenditure and revenue expenditure................................13
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Accounting refers to the recording of the financial transaction along with storing, sorting,
retrieving, summarising and presenting the result in different types of financial reports like profit
and loss account and balance sheet. The report will deals with some practical aspects of
accounting. These aspects are like recording the transaction in journals. Posting them in ledger
and then making trial balance out of the ledger accounts (Booth, 2018). And at last preparing the
financial statements which is profit and loss account and balance sheet with the help oh trial
balance. The report will also discuss the differences between the two types of expenditure which
are capital expenditure and revenue expenditure.
TASK 1
P1 Journal, posting of the journal in ledger, extracting trial balance from the journal and making
the financial statements that is profit and loss account and the balance sheet
In the books of _______
Journal
DATE PARTICULARS DEBIT CREDIT
05/04/19 Cash A/C
To capital A/C
300
300

07/04/19 Purchase A/C
To cash A/C
200
200
08/04/19 Cash A/C
To loan A/C
250
250
15/04/19 Motor van A/C
To cash A/C
150
!50
20/04/19 Cash A/C
To sales A/C
350
350
28/04/19 Rent paid
To cash A/C
50
50
29/04/19 Loan A/C
To cash A/C
200
200
30/04/19 Drawing A/C
To cash A/C
60
60
TOTAL 1560 1560
LEDGER A/C's
CASH A/C
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
05/04/19 to capital A/C 300 07/04/19 By purchase A/C 200
08/04/19 to loan A/C 250 15/04/19 by motor van 150
20/04/19 to sales A/C 350 28/04/19 by rent paid A/C 50
29/04/19 by loan paid 200
30/04/19 by drawings 60
30/04/19 by bal b/d 240
TOTAL 900 900
Capital a/c

DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
05/04/19 by cash A/C 300
30/04/19 to bal b/d 300
TOTAL 300 300
Purchase a/c
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
07/04/19 to cash A/C 200
30/04/19 by bal b/d 200
TOTAL 200 200
Loan a/c
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
29/04/19 to cash A/C 200 08/04/19 by cash A/C 250
30/04/19 to bal b/d 50
TOTAL 250 250
Motor van a/c
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
15/04/19 to cash A/C 150
30/04/19 by bal b/d 150
TOTAL 150 150
Sales a/c
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
20/04/19 by cash A/C 350
30/04/19 to bal b/d 350
TOTAL 350 350
Rent a/c
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT

28/04/19 to cash A/C 50
30/04/19 by bal b/d 50
TOTAL 50 50
Drawing A/C
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
30/04/19 to cash A/C 60
30/04/19 by bal b/d 60
TOTAL 60 60
TRIAL BALANCE
PARTICULARS DEBIT CREDIT
Cash A/C 240
Capital A/C 300
Purchase A/C 200
Loan A/C 50
Motor Van A/C 150
Sales A/C 350
Rent A/C 50
Drawing A/C 60
TOTAL 700 700
PROFIT AND LOSS A/C
PARTICULAR AMOUNT PARTICULAR AMOUNT
to purchase A/C 200 by sales A/C 350
to rent A/C 50
to profits 100
TOTAL 350 350

BALANCE SHEET
LIABILITIES AMOUNT ASSET AMOUNT
Capital (WN) 340 Motor van a/c 150
Loan 50 Cash a/c 240
TOTAL 390 390
Working note
Capital 300
+Net profits 100
-Drawings (60)
TOTAL 340
TASK 2
P2 Journal, posting of the journal in ledger, extracting trial balance from the ledger and making
the financial statements that is profit and loss account and the balance sheet
In the books of ______
Journal
DATE PARTICULARS DEBIT CREDIT
01/01/19 Cash A/C
to capital A/C
5000
5000
02/01/19 Motor van A/C
to cash A/C
600
600
03/01/19 Purchase A/C
to cash A/C
1300
1300
04/01/19 Cash A/C
to loan A/C
1000
1000
10/01/19 Motor van A/C
to cash A/C
200
200

13/01/19 Cash A/C
to sales A/C
300
300
20/01/19 Cash A/C
to sales A/C
500
500
24/01/19 Expenses A/C
to Cash A/C
150
150
27/01/19 Loan A/C
to Cash A/C
350
350
30/01/19 Drawing A/C
To Cash A/C
175
175
TOTAL 9575 9575
LEDGER A/C's
Cash a/c
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
01/01/19 to capital A/C 5000 02/01/19 by motor van 600
04/01/19 to loan A/C 1000 03/01/19 By purchase A/C 1300
13/01/19 to sales A/C 300 10/01/19 to motor van 200
20/01/19 to sales A/C 500 24/01/19 to expenses 150
27/01/19 by loan a/c 350
30/01/19 by drawings 175
31/01/19 by bal b/d 4025
TOTAL 6800 6800
Capital a/c
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
01/01/19 by cash A/C 5000
31/01/19 to bal b/d 5000
TOTAL 5000 5000

Motor van a/c
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
02/01/19 to cash A/C 600
10/01/19 to cash A/C 200
31/01/19 by bal b/d 800
TOTAL 800 800
Purchase a/c
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
03/01/19 to cash A/C 1300
31/01/19 by bal b/d 1300
TOTAL 1300 1300
Loan a/c
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
27/01/19 to cash A/C 350 04/01/19 by cash A/C 1000
31/01/19 to bal b/d 650
TOTAL 1000 1000
Sales a/c
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
13/01/19 to cash a/c 300
31/01/19 to bal b/d 800 20/01/19 to cash a/c 500
TOTAL 800 800
Expense a/c
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
24/01/19 to cash A/C 150
31/01/19 by bal b/d 150
TOTAL 150 150

Drawing a/c
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
30/01/19 to cash A/C 175 31/01/19 by bal b/d 175
TOTAL 175 175
TRIAL BALANCE
PARTICULARS DEBIT CREDIT
Cash a/c 4025
Capital a/c 5000
Motor van a/c 800
Purchase a/c 1300
Loan a/c 650
Sales a/c 800
Expense a/c 150
Drawings a/c 175
total 6450 6450
PROFIT AND LOSS A/C
PARTICULAR AMOUNT PARTICULAR AMOUNT
to purchase A/C 1300 by sales A/C 800
to expenses 150 by loss 650
1450 1450
BALANCE SHEET

LIABILITIES AMOUNT ASSET AMOUNT
Capital (WN) 4175 CASH A/C 4025
loan 650 MOTOR VAN A/C 800
4825 4825
Working note
Capital 5000
-Net loss (650)
-Drawings (175)
TOTAL 4175
TASK 3
P3 Journal, posting of the journal in ledger, extracting trial balance from the ledger accounts and
making the financial statements that is profit and loss account and the balance sheet
In the books of______
Journal
DATE PARTICULAR DEBIT CREDIT
02/01/19 Harvey a/c
to sales a/c
124
124
05/01/19 Wages a/c
to cash a/c
12
12
Purchase a/c
to rich a/c
150
150
07/01/19 Cash a/c
to smith a/c
18
18
09/01/19 Max a/c
to cash a/c
21
21
11/01/19 Cash a/c
to sales a/c
64
64

14/01/19 Wages a/c
to cash a/c
14
14
Purchase a/c
to cash a/c
75
75
15/01/19 Rich a/c
to cash a/c
162
162
20/01/19 Office expenses a/c
to cash
32
32
21/01/19 Wages a/c
to cash a/c
17
17
Cash a/c
to sales a/c
110
110
23/01/19 Office expenses a/c
to cash a/c
3
3
Cash a/c
to Harvey a/c
25
25
28/01/19 Cash a/c
to sales
84
84
Wages a/c
to cash
15
15
31/01/19 Cash a/c
to sales
30
30
Total 956 956
LEDGER A/C's
Harvey a/c
DATE PARTICULAR AMOUNT DATE PARTICULAR AMOUNT
01/01/19 to bal b/d 39 23/01/19 by cash A/C 25