Accounting for Business
Journalizing these transactions is quite relevant since most of these transactions are very vital to the business. These transactions make the business to achieve its sole interest in the long run. Such transactions help the business to attract more people in the long run. This creates a better understanding of the issues that affect the business performance. In most cases, these transactions are recorded in a single journal. This is useful as it gives the users a clear look of how the business is performing. The journals well organized can help to create a better and accessible way to attract more customers. The transactions are clear and hence easy to elaborate. The journals are actually the best to represent the accounting information to its users worldwide since they employ similar rules and procedures.
In most businesses, there is always a need to represent the accounting in an orderly manner. This creates a better way that is quite affordable to all businesses. Through these, there is a better approach that is easily adopted and hence there is accuracy and consistence in the information.
Dr Cash at bank Cr
Capital 15,000 Rent 590
Revenue 1,530 Equipment 3,000
Receivable 40 Supplies 250
Revenue 1,330 Insurance 190
Telephone 60
Dr account receivable Cr
Revenue 70 Bank 40
Revenue 60
Dr supplies Cr
Payable 250
Payable 70
Dr equipment Cr
Cash 3,000
Loan 4,000
Dr accounts payable Cr
Bank 250 Supplies 250
Dr loan payable Cr
Equipment 4000
Dr A.Majild capital Cr
Bank 15,000
Dr revenue Cr
Bank 1,530
Bank 1,330
Receivable 70
Receivable 60
Dr rent expense Cr
Bank 790
Dr Insurance expense Cr
Bank 190
Dr telephone expense Cr
Bank 60
This is the other part that is very essential to the finalizing of the accounts. The general journal has very essential elements that are considered in accounts. This is quite necessary since the development of every business is crucial. In the real definition of general journal, it is wise to include the debit and credit side of the transactions. This will lead to better and reliable results in the final financial statements. The reliability of general journal relies on the figures obtained from the other ledgers. In actual terms, there is a lot success in businesses that adopt general ledgers as compared to those which do not. This is actually the best approach in the long run.
| ACCOUNT: Cash at Bank | Account No. 1-101 | |||||
| Date | Explanation | Post Ref | Debit | Credit | Balance | |
| 2012 | ||||||
| Rent | 590 | |||||
| Equipment
Supplies Insurance Telephone Capital Revenue Receivable Revenue |
15,000 1,530 40 1,330 |
3,000
250 190 60 |
13,610 |
|||
| ACCOUNT: Accounts Receivable | Account No. 1-102 | |||||
| Date | Explanation | Post Ref | Debit | Credit | Balance | |
| Revenue
Revenue Bank |
70
60 |
40 |
110 |
|||
| ACCOUNT: Supplies | Account No. 1-110 | |||||
| Date | Explanation | Post Ref | Debit | Credit | Balance | |
| Payable | 250 | |||||
| Payable | 70 | |||||
| 320 | ||||||
| ACCOUNT: Equipment | Account No. 1-120 | |||||
| Date | Explanation | Post Ref | Debit | Credit | Balance | |
| Cash | 3,000 | |||||
| Loan | 4,000 | 7000 | ||||
| ACCOUNT: Accounts Payable | Account No. 2-101 | |||||
| Date | Explanation | Post Ref | Debit | Credit | Balance | |
| Supplies | 250 | |||||
| Bank | 250 | |||||
| ACCOUNT: Loan Payable | Account No. 2-110 | |||||
| Date | Explanation | Post Ref | Debit | Credit | Balance | |
| Equipment | 4,000 | 4,000 | ||||
| ACCOUNT: A. Majild, Capital | Account No. 3-101 | |||||
| Date | Explanation | Post Ref | Debit | Credit | Balance | |
| Bank | 15,000 | 15,000 | ||||
| ACCOUNT: Revenue | Account No. 4-101 | |||||
| Date | Explanation | Post Ref | Debit | Credit | Balance | |
| Bank | 1,530 | |||||
| Bank | 1,330 | |||||
| Receivable
Receivable |
70
60 |
2,990 |
||||
| ACCOUNT: Rent Expense | Account No. 5-110 | |||||
| Date | Explanation | Post Ref | Debit | Credit | Balance | |
| Bank | 790 | 790 | ||||
| ACCOUNT: Insurance Expense | Account No. 5-120 | |||||
| Date | Explanation | Post Ref | Debit | Credit | Balance | |
| Bank | 190 | 190 | ||||
|
ACCOUNT: Telephone Expense |
Account No. 5-130 | |||||
| Date | Explanation | Post Ref | Debit | Credit | Balance | |
| Bank | 60 | |||||
The trial balance is used by most business to show the transactions that have taken place within a month. In actual terms, the business has created the use of the trial balance to help improve on the quality of information that is given by the accountant. This is prepared at the end of each month. The trial balance in actual sense is meant to give the best approach to draw balance sheet. The figures used here are from the general journal. They are actually correct and represent the final details.
| ANG MAJILD, BOAT HIRE
Trial Balance as at 30 November 2012 |
|||||
| Account | Account No. | Debit | Credit | ||
| Cash at bank | 1-101 | 13,610 | |||
| Accounts receivable | 1-102 | 110 | |||
| Supplies | 1-110 | 320 | |||
| Equipment | 1-120 | 7.000 | |||
| Accounts payable | 2-101 | 0 | |||
| Loan payable | 2-110 | 4,000 | |||
| A. Majild, Capital | 3-101 | 15,000 | |||
| Revenue | 4-101 | 2,990 | |||
| Rent expense | 5-110 | 790 | |||
| Insurance expense | 5-120 | 190 | |||
| Telephone expense | 5-130 | 60 | |||
| 22,080 | |||||
These are final statements that are very important to the business as they ensure that the final figures are correct. They show the real profits of the business. They are the best statements to the investors for decision-making purposes.
| ANG MAJILD, BOAT HIRE
INCOME STATEMENT FOR THE YEAR ENDED NOVEMBER 2012 |
||
| $ | $ | |
| Income | 1,050 | |
| Less Expenses: | ||
| Rent | 340 | |
| Wages | 400 | 740 |
| Profit | $ 310 | |
- Statement of Changes in Equity
| ANG MAJILD, BOAT HIRE
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED NOVEMBER 2012 |
||
| $ | ||
| Capital contributions | 40 000 | |
| Add: Profit | 310 | |
| 40 310 | ||
| Less: Drawings | 150 | |
| Closing Capital | $ 40 160 | |
(vii) Balance Sheet (Statement of Financial Position)
| ANG MAJILD, BOAT HIRE
BALANCE SHEET AS AT NOVEMBER 2012 |
|||||
| $ | $ | ||||
| ASSETS | LIABILITIES | ||||
| Cash at Bank | 29,660 | A/c’s Payable | 2,500 | ||
| Computer Equipment | 3,000 | ||||
| Vehicles | 10,000 | EQUITY | 40,160 | ||
| TOTAL | $ 42,660 | TOTAL | $ 42,660 | ||