Recording Transactions: Double Entry Bookkeeping & Ledgers

This report provides a comprehensive overview of bookkeeping principles and practices, focusing on the accurate and timely recording of financial transactions. It begins with an explanation of double-entry bookkeeping, detailing the steps involved in recording transactions, updating accounts, and preparing financial statements. The report then demonstrates the implementation of various business transactions using books of prime entry, ledgers, and journals, including purchases, sales, capital investments, and expense payments, with detailed journal entries and ledger postings. Furthermore, it covers the extraction of ledger balances into a trial balance to ensure the accuracy of recorded transactions and the development of a bank reconciliation statement to reconcile bank-related entries and identify errors. Finally, the report differentiates between suspense and control accounts and performs control account reconciliation for accounts receivable and payable, providing a thorough understanding of essential bookkeeping concepts and their practical application in managing financial records.

UNIT 10

Contents
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
P1. How to record double entry bookkeeping transactions in a timely and accurate way..........3
P2 Implement a range of business transactions with the help of books of prime entry, double
entry bookkeeping, ledgers and journals.....................................................................................4
P3. With the help of data provided, extract ledger balance into a trail balance fir a company to
accurately record transactions....................................................................................................12
P4. Develop a bank reconciliation statement with the help of give information for a company.
...................................................................................................................................................13
P5. State the differences and role among suspense and control accounts.................................15
P6. Perform control account reconciliation for accounts receivable and payable from given
data.............................................................................................................................................17
CONCLUSION..............................................................................................................................18
REFERENCES..............................................................................................................................19

INTRODUCTION
The report prepared as under takes in account the explanation of Bookkeeping which can be
explained as recording of all finance based transactions which include sales, purchase, payment
and receipts. In the report as under, transactions can be recorded in a chronological order which
would serve as a better technique and method to understand terms in a better way. Ledger
accounts and trial balances would be developed and prepared for showing accurate and reliable
way for recording entries as well as transactions. In addition, bank reconciliation statement
reflects bank related entries and identify errors & omissions being made. It also takes into
account suspense and control account which would be differentiated and performed for accounts
payable and receivable as well (Aleksieva, Valchanov and Huliyan, 2020).
TASK
P1. How to record double entry bookkeeping transactions in a timely and accurate way.
Double Entry bookkeeping is a way of recording the transaction into the books of account
in which at least two accounts get affected one is debit and another one is credit and also have
the same amount.
Double entry bookkeeping contain a process which are as follows-
 Produce document: The very first step of double entry bookkeeping is producing a
document which is generally known as invoice. In this document all the information
related to product and the costumer are included like all the items which consumer
purchase from the seller, date of the transaction, address and name of the customer, and
the last amount payable by the customer for purchasing the product.
 Recording: The next step of double entry bookkeeping is the recording of the transaction
in the books of accounts by the help of the document which is known as invoice consist
all the information like date, amount, invoice no, and address of the customer, some of
the information from invoice are used in recording the transaction like name, amount and
date.
 Update accounts: Each and every account have a separate ledger which contain
information like date and amount. These ledgers may contain various transaction and all
these have to be verified by the accountant of the organisation and if any error is found

then, it has been update through this activity the accounts can be accurate (Baralla and
et.al., 2021).
 Debit and Credit: In double entry bookkeeping every transaction have equal debit and
equal credit and if any mistake is done by the organisation then the accounts will not
match so the organisation have to be efficient and focused while recording the
transactions. It helps the organisation to make the business decision if the accounts are
accurate.
 Chart of accounts: It refers to the statements in which all transaction related to the
businesses are recorded. It shows the accounts that are needed for running a business and
to prepare financial statements.
 Mathematical formula of double entry: It is known as the accounting equation which is
used to maintain the structure of the ledger. The accounting equation is Capital = Assets-
liabilities.
 Preparation of Trial Balance: Trail consist all the accounts of the ledgers with their
respective debit and credit balance. It helps the organisation to evaluate all accounts and
rectify those accounts if they have any kind of error.
 Preparation of Financial Statements: After preparing trail balance organisations have to
prepare the financial statements of the business which are profit and loss account,
balance-sheet, cash-flow statements and notes to accounts all these accounts and
statements helps the organisation to access the financial position of the business. Like
profit and loss account shows the income and expenditure during the accounting period,
balance-sheet shows the all assets and liabilities of the business, cash flow statement
shows the net inflow and outflow of the cash and Notes to account helps the investors to
understand the financial position of the organisation (Chari, 2022).
P2 Implement a range of business transactions with the help of books of prime entry, double
entry bookkeeping, ledgers and journals.
1. Journals: It is an account which considers all the finance based transactions which are
connected with accounts used for future reconciling and transfer of data such as general
ledger. It consists of the amount of transaction and date which would be a short
description. Main information which is included in journals can be explained as expenses,
sales, inventory, debts and cash. Such transactions would be recorded on a daily basis

because the guess work later might lead to errors and issues (Gerrits, Kromes and
Verdier, 2020).
2. Ledgers: It can be explained as a record or account which is used for storing book
keeping entries which could later be used for income statements and balance sheets as
well. Posting to a ledger can be explained as a procedure to record debit and credit sides.
A ledger is a account where all the accounting entries are being taken into consideration.
3. Double entry book keeping: It can be explained as a concept which is used in present day
book keeping which can be stated as financial transaction which is recorded in two
different ledger accounts for once on credit side and on debit side as well for satisfying
the accounting equation developed.
Accounting equation: Assets = Equity + Liabilities
The double entry book keeping standardises the accounting procedure and improve the accuracy
of financial records and also minimizing the errors as well. For instance, if a company has taken
any loan amount from banking institutions the borrowed fund would raise the liability and asset
of the enterprise as well i.e. there will be a rise in cash funds at bank and also increase in long
term liabilities as well.
4. Book of prime entry: It can be defined as a book where the entries are being recorded and
taken into account before entering into double entry system. These books consider cash
book, daybook and journal as well. For cross checking the transactions, looking after the
ledgers would be tedious task so rather prime books are being used for searching the data
and information. It would further provide a chronological record and errors; mistakes can
be identified in a simpler form. It can also be adapted for future references and providing
backup in case anything goes wrong or renders unplanned results with books of accounts.
Following is the list of business related transactions:
1. Purchased a home for £5400 on 2nd October.
2. Sold goods having a worth of £2800 on 5th October.
3. Capital invested in business enterprise £71800 dividend among cash, car, flat and back
with amounts 4800, 12000, 45000 and 10000 respectively on 1st October 2021.
4. Purchased a printer and computer for £200 and £800 respectively on 4th October.
5. Received rent of £800 on 21st October.
6. Paid £110 for repairs on 12th October.

7. Sold goods worth £300 on credit and £1800 to Rayan in cash on 23rd October.

8. Drawings which are being made is of £1200 and from bank on 31st October.
9. Paid rent £850 by bank on 30th October.
10. Paid wages £820 by banks on 26th October.
11. Purchased laptop worth £1700 from bank on 24th October.
Date Particulars Debit Credit
01/10/21 Bank a/c
Cash a/c
Flat a/c
Car a/c
Capital a/c
10000
4800
45000
12000
71800
02/10/21 Purchase a/c
Home
5400
5400
04/10/21 Computer
Printer
Bank a/c
800
200
1000
05/10/21 Bank a/c
Sales a/c
2800
2800
12/10/21 Repair Expenses a/c
Cash a/c
110
110
18/10/21 Home Ltd a/c
Purchase return a/c
250
250
21/10/21 Bank a/c
Rent income
800
800
23/10/21 Cash a/c
Rayan a/c
Sales a/c
1800
300
2100
24/10/21 Laptop a/c
Bank a/c
1700
1700

26/10/21 Wages a/c
Bank a/c
820
820
30/10/21 Rent expenses
Bank a/c
850
850
31/10/21 Drawings a/c
Bank a/c
1200
1200
31/10/21 Cash a/c
Rayan a/c
150
150
Bank a/c
Dr. Cr.
Date Particulars Fol Amount Date Particulars Fol Amount
05/10/21 Sales 2800 04/10/21 Computer 800
01/10/21 Capital 10000 04/10/21 Printer 200
21/10/21 Rent income 800 24/10/21 Laptop 1700
26/10/21 Wages 820
30/10/21 Rent expense 850
31/10/21 Drawings 1200
31/10/21 Balance c/d 8030
Total 13600 Total 13600
Cash a/c
Dr. Cr.
Date Particulars Fol Amount Date Particulars Fol Amount
01/10/21 Capital 4800 12/10/21 Repair expense 110
23/10/21 Sales 1800

23/10/21 Sales 700
31/10/21 Rayan 150 31/10/21 Balance c/d 7340
Total 7450 Total 7450
Sales a/c
Dr. Cr.
Date Particulars Fol Amount Date Particulars Fol Amount
31/10/21 Balance c/d 5600 05/10/21 Bank 2800
23/10/21 Cash a/c 1800
23/10/21 Cash a/c 700
23/10/21 Rayan a/c 300
Total 5600 Total 5600
Capital a/c
Dr. Cr.
Date Particulars Fol Amount Date Particulars Fol Amount
31/10/21 Balance c/d 71800 01/10/21 Bank a/c 10000
01/10/21 Cash a/c 4800
01/10/21 Flat a/c 45000
01/10/21 Car a/c 12000
Total 71800 Total 71800
Rayan a/c
Dr. Cr.
Date Particulars Fol Amount Date Particulars Fol Amount
23/10/21 Sales a/c 300 31/10/21 Cash a/c 150

31/10/21 Balance c/d 150
Total 300 Total 300
Purchase a/c
Dr. Cr.
Date Particulars Fol Amount Date Particulars Fol Amount
02/10/21 Home ltd. a/c 5400 18/10/21 Home Ltd. 250
31/10/21 Balance c/d 5350
Total 5400 Total 5400
Home Ltd. A/c
Dr. Cr.
Date Particulars Fol Amount Date Particulars Fol Amount
18/10/21 Purchase
return
250 02/10/21 Purchase a/c 5400
31/10/21 Balance c/d 5150
Total 5400 Total 5400
Flat A/c
Dr. Cr.
Date Particulars Fol Amount Date Particulars Fol Amount
01/10/21 Capital 45000 31/10/21 Balance c/d 45000
Total 45000 Total 45000
Car a/c
Dr. Cr.
Date Particulars Fol Amount Date Particulars Fol Amount

01/10/21 Capital 12000 31/10/21 Balance c/d 12000
Total 12000 Total 12000
Printer a/c
Dr. Cr.
Date Particulars Fol Amount Date Particulars Fol Amount
04/10/21 Bank a/c 200 31/10/21 Balance c/d 200
Total 200 Total 200
Drawings a/c
Dr. Cr.
Date Particulars Fol Amount Date Particulars Fol Amount
31/10/21 Bank a/c 1200 31/10/21 Balance c/d 1200
Total 1200 Total 1200
Wages a/c
Dr. Cr.
Date Particulars Fol Amount Date Particulars Fol Amount
26/10/21 Bank a/c 820 31/10/21 Balance c/d 820
Total 820 Total 820
Laptop
Dr. Cr.
Date Particulars Fol Amount Date Particulars Fol Amount
24/10/21 Bank a/c 1700 31/10/21 Balance c/d 1700
Total 1700 Total 1700

Rent
Dr. Cr.
Date Particulars Fol Amount Date Particulars Fol Amount
30/10/21 Bank a/c 850 21/10/21 Bank a/c 800
31/10/21 Balance c/d 50
Total 850 Total 850
Repair Expenses
Dr. Cr.
Date Particulars Fol Amount Date Particulars Fol Amount
12/10/21 Cash 110 31/10/21 Balance c/d 110
Total 110 Total 110
Computer
Dr. Cr.
Date Particulars Fol Amount Date Particulars Fol Amount
04/10/21 Bank a/c 800 31/10/21 Balance c/d 800
Total 800 Total 800
P3. With the help of data provided, extract ledger balance into a trail balance fir a company to
accurately record transactions.
It is an accounting written record where final balances and amounts of all ledger accounts are
being merged on debit side and credit side column and both the sides are required to be equal.
The development of trial balance of any company is usually carried out at the end of accounting
year. The main purpose of generating a trial balance is to ensure that the entries or transactions
are being recorded in the financial records of the business are accurate and correct (Kajla, Sarin
and Raj, 2022).
Particulars Debit Credit

Bank 8030
Cash 7340
Flat 45000
Car 12000
Capital 71800
Sales 5600
Purchase 5150
Home Ltd 5150
Rent income 50
Repair expense 110
Rayan 150
Wages 820
Drawings 1200
Rent expense 850
Laptop 1700
Printer 200
Computer 800
Total 82550 82550
P4. Develop a bank reconciliation statement with the help of give information for a company.
It is a banking document which is useful for comparing the cash balances of the business and
checking out the amount which already exists in the banking statement.
1. The transaction from the credit side of cash book which left unticked and not taken in
account is that of Annie £150 and Ansoff £300.

2. The transaction from the debit side of cash book which left unaccounted is of Dsouza and
co. £10.
3. Charges of bank £10.
4. The transactions from the debit bank side of the cash book which remains unticked which
is directly debited for insurance £50.
5. The three transactions of the bank statement that are being observed to remain unticked .
6. Cash book of Jennifer must update which is an essential part of the hard double entry
recall. That is the reason why it must be correct and should include all the transactions or
items which are related to a business.
7. Because of lack in right transactions or left unrecorded entries, the transaction left antique
(Kalinina, Inshakova and Goncharov, 2019).
Cash book
Dr. Cr.
1st of may balance b/d 300 15th of
April
insurance 40
50 30th of
April
bank charges 10
350 30th of
April
balance c/d 300
01/05/2022 balance b/d 300 350
In Jennifer's trial balance, balance is to be entered for the stop. It is also needed to show the
balance in her balance sheet as a current asset.
Dr. Jennifer's A/C
Cr.
17th April Bank 50
Dr. Insurance A/C Cr.
15th April Bank 50

Dr. bank charges A/c Cr.
30th April 10
Cash at bank 300
Ansoff 300
Annie 150
750
lodgements not credited -10
Balance at bank as per bank
statement 740
P5. State the differences and role among suspense and control accounts.
Role of suspense account:
 If an expense has taken place, then the benefit or advantage would be received more than
one account and then such sort or type of transactions could be placed in suspense
account for a short time span.
 It would hold the funds of investors for shorter span of time until the quantity is being
invested again.
 If an accountant is not sure as which account must be debited or credited with the help of
transaction, then they can pass the transaction based entry in suspense account on
temporary basis.
Role of control account:
It would be helpful in recognising errors in an account of an individual or any personal.
 It is having the capability to bring a debtors account against the accounting of a creditor.
IN such cases, entries would affect the control account as well as personal account too.
 The positioning of creditors and debtors can be inserted from a single account with the
help of control account. It is impossible to abstract the quantity from a vendor or debtor's
account.
 It would be useful in rectifying arithmetical errors in accounts which was entered in
ledger.
Suspense account: It can be defined as an account which is being used on temporarily bais
for recording the transactions which are existing due to uncertainty for recording them. When the

staff of accounting would be looking into and also will clarify the purpose of maintaining such
sort of accounts. It results to be very advantageous for having a suspense account, a bit of not
able to record the transaction at all till there is adequate availability of information for creation of
entry to rectify the accounts. If not being recorded, then such larger transactions sometimes
might not get recorded till the end of a reporting period which then would result in incorrect
financial transactions. In relation with investment, a suspense is a sort of brokerage account
where an investor or sponsor would be leaving the funds such that they are able to put the money
for purchase and acquisition of new sort of investments. In suspense account, it would be holding
the fund of investors up to the quantity which may not be invested again (Kodali, Yerroju and
Yogi, 2018).
Control account: It is a summarising account which is being recorded in the general
ledger. It can also be denoted as a adjustment or controlling account. All the information about a
control account is formed in a correlated subsidiary ledger. The work of control account is
mainly to keep all the general ledger clear and clean with the information and it would be
containing the reliable data which would be helpful in preparation of financial records. A
subsidiary general ledger would empower for tracking transaction to control account for other
information of transaction. There is respective individual transaction which depict or denote in
both of the accounting system, but it is usually shown as the ending balance. The most usual use
of control accounts is to develop a summary in accounts receivable and accounts payable as it
would be containing many number of transactions. The balance in control account is the ending
totalled amount of its subsidiary ledger.
Suspense account Control account
It is a temporary based accounting system
where the difference among credit and debit
balance is being adjusted with the assistance of
such accounts
Irt can be explained as a summary account
which would consider the balance of credit and
debit side of subsidiary accounts in ledger.
It is short time account in ledger form. It is a summarised account in general ledger.
Example: It takes place when one account is
being credited with 87 and one account is
debited with 77 (Kuter, Gurskaya and
Example: Total credit sales in a day, total cash
accumulated from clients in a day.

Kuznetsov, 2019).
P6. Perform control account reconciliation for accounts receivable and payable from given data.
Control accounts are used replicate the account receivables and account payable. Other than
changing the ledger accounts the changes are addressed by using Bank reconciliation statement
which helps in rectifying the business transactions. Account receivable ledger control account is
used to reduce the effect of general ledger account which have been used to store every
transaction of the organisation. On the other side, account payable is the amount is to be paid to
the supplier of the goods. These accounts follow the double entry accounting system which
means any amount which is posted on the debit side of the general ledger will be posted to the
credit side of the general ledger. The procedure of reconciliation is done at the end of the month
before issuing the financial statements. In case if the reconciliation is not performed and an error
pops out of the general ledger than this results in the material inaccuracy in financial statements
of organisation. There should be reconciliation of the accounts receivables at least at the end of
the financial year so that in case of any accuracies in the receivables can be removed from
financial statements before the analysation of the final accounts by the external auditors of the
entity (Lopes and Pereira, 2018).
The organisation has to consider all the aspect before closing the accounts of the company
like the organisation have to check and verify each transaction if any amount is due to pay or any
amount which is not received by anyone, the total of the ledgers are matching or not. By the help
of this activity the accounts department of the organisation becomes confident that they did not
forget any entry or they did not have any amount due to anyone. This process is termed as
reconciliation of accounts payable. This process can be turned out as difficult and time
consuming for those organisation who have done it for first time. This process can be easier for
the account of the organisation when all the errors and mistakes are found at one place so by the
help of which accountant can make reconciled books of account easily. The most important
function of accountant is to control the account in the organisation so there will be no chance of
any error in the general ledger (Nadir, 2019).

CONCLUSION
In the above report, process of accounting is defines using double entry system. A trail
balance is prepared from the ledger accounts formed by business transactions. Bank
reconciliation statement shows the correction in the business transactions which have been
modified. Control and suspense account is prepared to explain the reason behind the account
payable and account receivables.

REFERENCES
Books and Journals
Aleksieva, V., Valchanov, H. and Huliyan, A., 2020, June. Implementation of smart-contract,
based on hyperledger fabric blockchain. In 2020 21st International Symposium on
Electrical Apparatus & Technologies (SIELA) (pp. 1-4). IEEE.
Baralla, G. and et.al., 2021. Ensuring transparency and traceability of food local products: A
blockchain application to a Smart Tourism Region. Concurrency and Computation:
Practice and Experience, 33(1), p.e5857.
Chari, T., 2022. 4Between State Interests and Citizen Digital Rights. Digital Dissidence and
Social Media Censorship in Africa.
Gerrits, L., Kromes, R. and Verdier, F., 2020, August. A true decentralized implementation
based on iot and blockchain: a vehicle accident use case. In 2020 International
Conference on Omni-layer Intelligent Systems (COINS) (pp. 1-6). IEEE.
Kajla, T., Sarin, V. and Raj, S., 2022. Blockchain in the Banking Sector: Revolution or Digital
Disruption?. In Applications, Challenges, and Opportunities of Blockchain Technology
in Banking and Insurance (pp. 151-159). IGI Global.
Kalinina, A.E., Inshakova, A.O. and Goncharov, A.I., 2019. Polysubject jurisdictional
blockchain: electronic registration of facts to reduce economic conflicts. In Ubiquitous
Computing and the Internet of Things: Prerequisites for the Development of ICT (pp.
205-213). Springer, Cham.
Kodali, R.K., Yerroju, S. and Yogi, B.Y.K., 2018, October. Blockchain based energy trading.
In TENCON 2018-2018 IEEE Region 10 Conference (pp. 1778-1783). IEEE.
Kuter, M.I., Gurskaya, M.M. and Kuznetsov, A.V., 2019. Alexander Galagan: Russian titan of
the Enlightenment in the history of accounting. Accounting History, 24(2), pp.293-316.
Lopes, J. and Pereira, J.L., 2018, October. Blockchain technologies: Opportunities in healthcare.
In The 2018 International Conference on Digital Science (pp. 435-442). Springer,
Cham.
Nadir, R.M., 2019, November. Comparative study of permissioned blockchain solutions for
enterprises. In 2019 International Conference on Innovative Computing (ICIC) (pp. 1-
6). IEEE.
Ngamjarussrivichai, P., Jeemali, P. and Panitsettakorn, W., 2018, May. Designing an online
marketing investment evaluation system case study of cosmetics manufacturing
company. In 2018 5th International Conference on Business and Industrial Research
(ICBIR) (pp. 469-474). IEEE.
Rimba, P. and et.al., 2020. Quantifying the cost of distrust: Comparing blockchain and cloud
services for business process execution. Information Systems Frontiers, 22(2), pp.489-
507.
Sakiz, B. and Kutlugün, E., 2018, May. Bitcoin price forecast via blockchain technology and
artificial intelligence algorithms. In 2018 26th Signal Processing and Communications
Applications Conference (SIU) (pp. 1-4). IEEE.
Viriyasitavat, W., Da Xu, L., Bi, Z. and Pungpapong, V., 2019. Blockchain and internet of things
for modern business process in digital economy—the state of the art. IEEE Transactions
on Computational Social Systems, 6(6), pp.1420-1432.

Wang, Z. and et.al., 2020. Blockchain-based framework for improving supply chain traceability
and information sharing in precast construction. Automation in construction, 111,
p.103063.