3. Record the following transactions in Tally Prime Date Amount (in RO) 2021 Opening Balances : Buildings A/C Furniture A/C Cash A/C Bank A/C Al Kamil Steel Product Company A/C ( Dr. Balance) Jan 1 40,000 25,000 10,000 12,500 10,000 7,500 Bank overdraft Capital A/C Brought additional capital into the business Jan 2 30,0`00 Jan 31 Deposited into bank Purchased goods and paid by cheque Purchased goods from Taghleef Industrial Company and got 5% trade discount 20,000 Feb 1 5,000 15,000 Feb 2 Mar 1 Cash Sales 10,000 Goods returned to Taghleef Industrial Company Purchased Equipment from Oman National Engineering Company Mar 2 1,000 20,000 Mar 31 Apr 1 Withdrew from bank for office use 2,000 Apr 2 Мay 1 May 2 May 31 Sold goods to National Industries Paid Wages and Salaries Goods returned by National Industries Paid carriage inwards 15,000 3,000 1,500 1,500 June 1 Received Commission 2,000 June 2 Received from National Industries 8,000 July 1 July 2 Paid to Taghleef Industrial Company 10,000 Received from Al Kamil Steel Product Company in full 9,500 settlement July 31 Aug 1 Aug 2 Paid to Taghleef Industrial Company in full settlement Goods Distributed as free samples 3,000 5,000 5,000 Received a cheque from National Industries in full settlement Aug 31 Sep 1 Sep 2 Oct 1 Cash taken by proprietor for personal use Paid Telephone charges by cheque 1,000 300 Paid Rent 2,000 Paid for Fuel and Power 1,000
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
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