Business Transaction Recording: Financial Statement and Ratio Analysis

This report provides a comprehensive analysis of recording business transactions, emphasizing the importance of accurate financial documentation for informed decision-making. It covers key areas such as journal entries, ledger accounts, trial balance formulation, income statement preparation, and balance sheet construction. Furthermore, the report includes a ratio analysis to assess the company's liquidity, profitability, and efficiency. The findings suggest that while the company is in relatively good financial health, there are areas that require improvement, particularly in managing resources and controlling expenses. The impact of external factors, such as the Covid-19 pandemic, on the company's financial performance is also considered, highlighting the need for adaptive strategies to ensure long-term sustainability and competitiveness.

Recording Business
Transaction

Contents
INTRODUCTION...........................................................................................................................................3
ASSIGNMENT 2............................................................................................................................................3
PART A.........................................................................................................................................................3
a) Preparing double entry system to record transaction in journal entries.............................................3
b) illustrating below ledge account to get opening balance...................................................................6
c) Formulating Trial balance as at 31st October 2021...........................................................................17
d) Preparing Income Statement for the period ended 31st October 2021............................................18
e) Formulating balance sheet as at 31st October 2021.........................................................................19
f) Writing letter......................................................................................................................................20
PART B.......................................................................................................................................................21
a) Determination of ratios.....................................................................................................................21
b............................................................................................................................................................23
CONCLUSION.............................................................................................................................................24
REFERENCES..............................................................................................................................................26

INTRODUCTION
Recording business transactions is an important factor that aids in acquiring knowledge
about the completed commercialization, allowing for a good alternative to decision-making. It is
centered into a double entry system, which records transactions in two accounts in order to
provide a comprehensive evaluation of the company's productivity (Haralayya, 2021). The
present report will include important details on issues such as journal entry documenting,
bringing statement of account from ledge, constructing trial balance, income statement, and
financial condition. These are mostly responsible for delivering critical information which helps
in determining the firm's current effectiveness. It will include the calculation of ratios in order to
assess the company's efficiency using this analytical approach.

ASSIGNMENT 2
PART A
a) Preparing double entry system to record transaction in journal entries

b) illustrating below ledge account to get opening balance