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Accounting Assignment 2

The document provides instructions to identify the basic steps in the accounting recording process, which includes analyzing transactions, entering them in a journal, and posting to ledger accounts. It also explains key accounting concepts like journals, ledgers, posting, and trial balances and how they help in the recording process. Sample journal entries are provided for various business transactions along with instructions to prepare ledger accounts and a trial balance.

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Fariha pervaiz Fariha
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158 views3 pages

Accounting Assignment 2

The document provides instructions to identify the basic steps in the accounting recording process, which includes analyzing transactions, entering them in a journal, and posting to ledger accounts. It also explains key accounting concepts like journals, ledgers, posting, and trial balances and how they help in the recording process. Sample journal entries are provided for various business transactions along with instructions to prepare ledger accounts and a trial balance.

Uploaded by

Fariha pervaiz Fariha
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Accounting of Management

Assignment -2

1- Identify the basic steps in the recording process.

Ans: The basic steps in recording process includes


Analysis each transaction.

Enter the transaction information in the journal.

Post these entries to the appropriate accounts in the ledger.

2- Explain what posting is and how it helps in the recording process.

Ans: Posting is a process of transferring entries to the ledger accounts.


Posting accumulates the effects of journal transactions in the individual ledger accounts.

3- Explain what a journal is and how it helps in the recording process.

Ans : The transactions are entered in the journal in order before being transferred to the
accounts.

The journal has a place to record the debit and credit on account for each of the provided
transactions.(different companies may have different type of journals but every company
has the most basic journal , a general journal).

The journal makes three contributions to the recording process.

1. It discloses in one place the complete effect of a transaction.

2. It provides a chronological record of different transactions.

3. It helps to locate errors because debit and credit amounts for each entry can be
compared.

4- Explain what a ledger is and how it helps in the recording process.

Ans : The entire group of accounts maintained by a company is called ledger.


The general ledger contains all the assert, liability and stockholders’ equity accounts.
Accounts in the general ledger are listed in the chart of accounts.

Information in the ledger provides management with the balances in various accounts.

5- Explain the purposes of a trial balance.

Ans: The main purpose of trial balance is to prove the mathematical equality of debits and
credits after posting.

It uncovers errors in journalizing and posting.

It is useful in the preparation of financial statements.

It is limited in that it will balance but not uncover errors when followings happens

 A transaction is not journalized.


 A wrong journal entry is posted
 Entry posted twice
 Incorrect accounts are used in journalizing and posting
 Offsetting errors are made in recording the amount of transactions.
6- Pass journal entries; prepare ledger accounts and trial balance for
following transactions.

Date Description Cash


Debit Credit
1-jan-19 Cash 1,00,000
Owner’s equity 1,00,000
3-jan-19 Building 50,000
On cash 50,000
5-jan-19 Cash borrow 70,000
Loan from bank 70,000
6-jan-19 Cash withdraw 20,000
To cash 20,000
8-jan-19 Cash 5,000
Sales 5,000
9-jan-19 Accounts receivable 10,000
Sales 10,000
10-jan-19 Cash 1,000
Received on A/R 1,000
Utility Bills 4,000
Paid bills on cash 4,000
15-jan-19 Fuel expenses 2,000
Paid in cash 2,000
18-jan-19 Wages expenses 2,00,000
Accounts payable 2,00,000
20-jan-19 Motor bike 30,000
Owners investment 30,000
22-jan-19 Purchases 6,000
On cash 6,000
23-jan-19 Return purchases 1,000
Cash 1,000
25-jan-19 Office equipments 2,000
Purchase on credit A/P(for 30 days) 2,000
26-jan-19 Cash 5,000
A/R 5,000
28-jan-19 Cash Paid (of office equipment) 1,000
On A/P 1,000
30-jan-19 Rent 15,000
Prepaid 15,000

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