Date Transaction details 01-Sep Started business by investing $10,000 from personal savings into a business' bank account and Computer Equipment worth $7,500. 02-Sep Purchased furniture from LEO Ltd for $5,000 paying by cheque. 04-Sep Purchased goods for resale from BELL Ltd on credit for $3,100. 05-Sep Took $1,000 from the bank account for cash use. 07-Sep Purchased goods for resale on credit from Taylor for $2,800 08-Sep Credit sales to Adrian and Evans for $3,500 and $2,200 respectively. 09-Sep Cash sales $700 09-Sep Returned goods to BELL worth $350 11-Sep Cash sales $1,200. 11-Sep Purchased goods for resale from Jaime paying by cash $1,200 12-Sep Paid fuel expenses $1,100 by cash. 13-Sep Evans returned goods amounting to $650. 14-Sep Adrian paid $750 in cash to her account. 15-Sep Sold goods to Kris for $1,300 on credit. 16-Sep Purchased goods on credit from BELL for $1,350. 18-Sep Paid Taylor $1,600 on their account by cheque. 20-Sep Evans paid $800 on his account by cash. 21-Sep Took cash of $1,250 for personal use. 22-Sep Paid BELL Ltd $850 on their account by cheque. 25-Sep Received cash of $900 from Kris 26-Sep Paid electricity expenses of $695 by cash. 27-Sep Paid water expenses of $290 by cash. 28-Sep Paid telephone expenses $450 by cash. 29-Sep Cash sales of $950. Record the transactions in the relevant journals
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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Date |
Transaction details |
|
01-Sep |
Started business by investing $10,000 from personal savings into a business' bank account and Computer Equipment worth $7,500. |
|
02-Sep |
Purchased furniture from LEO Ltd for $5,000 paying by cheque. |
|
04-Sep |
Purchased goods for resale from BELL Ltd on credit for $3,100. |
|
05-Sep |
Took $1,000 from the bank account for cash use. |
|
07-Sep |
Purchased goods for resale on credit from Taylor for $2,800 |
|
08-Sep |
Credit sales to Adrian and Evans for $3,500 and $2,200 respectively. |
|
09-Sep |
Cash sales $700 |
|
09-Sep |
Returned goods to BELL worth $350 |
|
11-Sep |
Cash sales $1,200. |
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11-Sep |
Purchased goods for resale from Jaime paying by cash $1,200 |
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12-Sep |
Paid fuel expenses $1,100 by cash. |
|
13-Sep |
Evans returned goods amounting to $650. |
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14-Sep |
Adrian paid $750 in cash to her account. |
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15-Sep |
Sold goods to Kris for $1,300 on credit. |
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16-Sep |
Purchased goods on credit from BELL for $1,350. |
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18-Sep |
Paid Taylor $1,600 on their account by cheque. |
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20-Sep |
Evans paid $800 on his account by cash. |
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21-Sep |
Took cash of $1,250 for personal use. |
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22-Sep |
Paid BELL Ltd $850 on their account by cheque. |
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25-Sep |
Received cash of $900 from Kris |
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26-Sep |
Paid electricity expenses of $695 by cash. |
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27-Sep |
Paid water expenses of $290 by cash. |
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28-Sep |
Paid telephone expenses $450 by cash. |
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29-Sep |
Cash sales of $950. |
- Record the transactions in the relevant journals
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