Page 77 - Book-keeping for Secondary Schools Student’s Book Form One
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Recording of business transactions
Accounts payable: Queen 258,000
: Edgar 820,000
*Capital (Assets-Liabilities) 20,452,000
Total 21,530,000 21,530,000
FOR ONLINE READING ONLY
Exercise 4.5
Mawingu started a business several years ago. She did not keep proper books of
accounts. On 1 January 2023 she decided to start keeping records by following
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the double entry system. From her previous memorandum records, she could come
up with the following assets and liabilities:
TZS
Cash in hand 50,000
Cash at bank 1,624,000
Furniture 410,000
Machinery 720,000
Accounts receivable: Lulu 316,000
Bunda 129,000
Accounts payable: Mangwana 217,000
Mkude 128,000
Required:
From the above information prepare a journal proper and calculate the amount of
capital as on 1 January 2023.
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Summary
Records of business transactions encompass the systematic documentation of all
financial activities and events undertaken by an enterprise. These records are vital for
maintaining accurate and comprehensive accounting information, which serves as the
foundation for financial management, analysis, and decision-making. Each transaction
is recorded in chronological order, supported by source documents such as invoices,
receipts, and bank statements, providing evidence and ensuring transparency in the
financial process. By adhering to the principle of double entry, businesses ensure that
their financial records are balanced and reliable. These records facilitate the preparation
of financial statements including components such as the statement of financial
position, income statement, and cash flow statement. They are also useful in audits, tax
reporting, and compliance with regulatory requirements.
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