Letter of Transmittal

05/01/2019
Mohsina Akter
Assistant Professor
Department of Accounting & Information Systems
Faculty of Business Studies
Jahangirnagar University

Sub: Submission of the term paper on Recording Process of ‘Brishti Varieties store’.

Dear Ma’am,

We are pleased to submit this term paper, which has been prepared for the requirement to
complete this Financial Accounting Course. We are very much privileged to submit this the term
paper on Recording Process of ‘Brishti Varieties store’

This term paper has facilitated us with wide range of information. We have researched a lot and
did the field work very carefully to complete this report. We also take this opportunity to witness
your effective supervision, guideline and feedback which has resulted our term paper to become
a professional one.

We will be grateful to you if our work is appreciated and request you to pinpoint any flaw so that
we can improve as a learner.

Thank You.

Sincerely yours,

Abu Sayed Mahamud ID# 20181097

Adina Sarawat ID# 20181046
Faria Khan Binti ID# 20173035
Md. Asaduzzaman ID# 20181077
Sonya Sultana ID# 20183075
 Acknowledgement
First of all I want to thanks to the Almighty Allah for giving us the opportunity to complete this
report. In addition, I am grateful to our group members for completing this report successfully.
We have gathered such useful knowledge while preparing this term paper.

First of all, We would like to thank our honorable academic supervisor Mohsina Akter, Assistant
professor, Department of Accounting & Information system, Jahangirnagar University. We are
thankful to her for his continuous support and supervision, suggestions and providing us with
valuable information that was very much needed for the completion of this paper.
 Executive Summary
A recordkeeping system is a system which captures, manages and provides access to records
through time. Recordkeeping systems can be either electronic or paper-based. Managers and
Heads of business units are required to establish and set up appropriate recordkeeping systems
for their business unit Retail is the process of selling consumer goods or services to customers
through multiple channels of distribution to earn a profit. In sole proprietorship business like
grocery shop record keeping process allows business owners recording the daily financial
transactions in an accounting system. It also allows business owners to precisely track their
income and expenses, which is necessary for creating accurate financial statements and
analyzing important financial activity. Doing one’s own bookkeeping for a store can save his
money but it requires an extra investment of time.

In this report we have covered that how a small enterprise like grocery shop keeps their record
for doing their business. We have discussed about the details of the business. Then we have find
out the elements of accounting chart regarding to his business. We have covered the list of
transaction part. Most importantly we have shown their recording system. According to their
recording system we have prepared the financial statements. Then we have compared between
their recording process and our recording system. Then we have found out what is their lacking
and afterthat we gave them a recommendation and finally we draw a conclusion.
 Introduction
A recordkeeping system is a system which captures, manages and provides access to records
through time. Recordkeeping systems can be either electronic or paper-based. Managers and
Heads of business units are required to establish and set up appropriate recordkeeping systems
for their business unit. Without it, it cannot function. Good recordkeeping can help you to find
the information you need. It promotes the creation of full and accurate records in the first place.
It also involves storing and managing records appropriately so that the information will be
available to you when you need it. In sole proprietorship business like grocery shop record
keeping process allows business owners recording the daily financial transactions in an
accounting system. It also allows business owners to precisely track their income and expenses,
which is necessary for creating accurate financial statements and analyzing important financial
activity. Doing one’s own bookkeeping for a store can save his money but it requires an extra
investment of time.

The organization ‘Brishti varieties store’ that I chose is a grocery shop. They usually sell the
daily consuming goods. They keep their transaction record in a very simple manner. In this
report we are able to show that how they do their record of daily transaction. They don’t usually
follow the rules and regulation of recording process. Basically they don’t identify business
transactions, don’t analyze those transactions, and don’t record them as journal entries, after that
they don’t post journal entries or maintain applicable ledger accounts. then don’t analyze the trial
balance and don’t make end of period adjusting entries, then they don’t post adjusting journal
entries and prepare the adjusted trial balance, lastly they don’t use the adjusted trial balance
to prepare financial statements.

They only calculate their daily sells and expense and the revenue. that is not appropriate method
of bookkeeping or recording. According to his given information we are here trying to make a
transactions, journal, ledger, income statement, owner’s equity statement and Balance sheet to
show how he should prepare or maintain record keeping.
 Details of Business
Name of the Organization : ‘Brishti Varieties Store’.

Business Owner : Md. Salah Uddin

Business type : Retail Shop

Address : Morol Kacha Bazar, 5-14/10, Norda, Gulshan, Dhaka-1212

Mobile : 01673-289158, 01969-166209

Ownership Status : Sole Proprietorship

Products : Rice, Dal, Ginger, Onion, potato, Soya Bean oil, Mustard oil ,
Pepper, Spice, Salt, Honey, Soap, Brush, paste, Noodles e.t.c.

Customers : The people living in that area.

Brishti Varieties Store is one of the most prominent Grocery shops which is located at Morol
Kacha bazar, Narda region, Dhaka. Md. Salah uddin is the owner of this Shop. He started his
business 8 years back from now. People of this area buy their daily consuming goods from his
shop. Recently, he has started the home delivery service.
 Brishti Varieties Store
CHART OF ACCOUNTS

Accounts Accounts Name Accounts Type

No

101 Cash Asset

112 Accounts receivable Asset

103 Furniture Asset

126 Inventory Asset

201 Accounts payable Liability

202 Rent payable Liability

212 Salaries & Wages payable Liability

301 Md. Salah Uddin Capital Owners’ Equity

306 Md. Salah uddin Drawing Owners’ Equity

400 Sales Revenue Revenue

711 Depreciation Expense Expense

729 Rent expenses Expense

List of Transactions
In the beginning of the month those who have buy their necessary products on account,
they pay their bill in cash.
In the 1st and 2nd week of a month many of the families buy their whole month
consumption goods. That time the transaction is much more higher than 3rd week or 4th
week.
During ‘Halkhata’ he has to pay lots of money to the companies.
 Record keeping system of Brishti Varieties Store

Md. Salah uddin the owner of Brishti varieties store keeps his daily record in a very different
way. He keeps his daily sales revenue in a drawer. He doesn’t bother about what product has
sold and how much sold. Whatever he sold from his shop kees the money in that particular
drawer. He keeps his daily sales in according to how much bil he has paid to the companies from
whom he Purchase his daily goods to sale. Beside this there are also some daily expenses for his
shop. For example, he has to give rent for his shop. Also there is food allowance expense, freight
expense and miscellaneous expense. Every day he also withdraws some money from the sales
revenue. He deals with all these expenses from that daily sales revenue. As the rent of the shop is
30,000 taka he daily keeps 1000 taka as rent from sales revenue and put it in another drawer.
After giving the daily bills to the company he has some money in that drawer. After closing the
shop he keeps that money in his home, which he considered his daily profit. Now, the amount he
paid to the companies, the amount he pays to deal with his daily expenses and the rest amount
which he keeps with him after closing the shop all these amount addition gives you the idea of
his daily sales. Basically, Md, Salah uddin invested 200000 taka when he started his business. He
buys his daily necessary goods everyday from different companies and pays 2/3 of it in cash and
rest is on account. Every day he sales product and give them bill. After giving bill he put a
signature on the invoice carried by the different company’s sales persons. He doesn’t basically
record which company and how much bill he has to pay in the next day. The sales people
basically keep that invoice with them. Again in the next day that sales person come and Md.
Salah uddin give them a minimum bill and put a signature on the invoice. That’s how his
business is going on. The concept of his sales record will be cleared if we see his any days
picture of sales record. For example, now I am getting the record of 15 & 16 september,2018
sales record to describe the whole recording scenario. On those days, he billed 28,400 taka,
28,800 taka consecutively to different companies from whom he buy his product. In the very first
paragraph you can see the companies name like Aci, Jui, Uniliver e.t.c. In the second Para he
used to keep record of his daily expenses. Here in the picture you can see the expense of 1600 of
both days. What he did next is he added the bill he paid to the companies and daily expense to
know the amount of sales for that day. So in 15 & 16 September his daily sales was 30,000 taka
and 30,400 consecutively. Another thing that I have mentioned earlier that before closing the
shop he has the 2000 or 3000 taka in his drawer which also comes from the sales revenue. He
keeps that money with him because he considered it as a daily profit which he don’t usually
record here.

That’s the exact scenario of record keeping system of Brishti varieties store.
 Recording process of sales on account

The organization owner simply writes down the names of the people to whom he sales on
account. He simply put the date and writes the amount of sales. After a certain period of time
when they pay back to Md. Salah uddin, he simply deduct the account from the previous amount.
When a person pays his whole due then he cut down that transaction in from this notebook
 Recording process followed by us
We have used the information of this organization; Brishti Varieties store and follow the
accounting principal process to prepare journal, ledger, trial balance and Financial statements.

The following events and transactions occurred during September,2018.

1. Md Salah uddin the owner of the org. invested 2, 00,000 taka cans when he started his
business.
2. His daily sales are 31393 taka on average per day.
3. The price of goods that he sold each day is 27080 taka.
4. He sold 15000 taka on account per month.
5. He bought furniture of 35,000 taka in cash when he started the business.
6. Monthly rent is 30,000 taka which is not paid yet.
7. He has two employees and from them he pays 8000 taka for one and 6000 taka for
another.
8. In every month he buys goods of 12,00,000 taka and pay 2/3 of it in cash and rest is on
account.
9. Owners’ drawing is 200 taka per day.
10. Food allowance for his employees is 200 taka per day.
11. Miscellaneous expense 6200 taka cash per month
12. Freight expense 200 taka per day in cash.
13. Depreciation expense is 2% per month.
 Brishti Varieties Store
General Journal
Date Account Details Reff. Debit Credit
30 Sept. 2018 Cash dr. ৳ 200,000.00
Owner’s Capital cr. ৳ 200,000.00
(investment of cash by owner)
30 Sept. 2018 Cash dr. ৳ 941,790.00
Sales Revenue cr. ৳ 941,790.00
(Receive cash from sales)
30 Sept. 2018 Cost of Goods Sold dr. ৳ 812,400.00
Inventory cr. ৳ 812,400.00
(Purchase inventory)
30 Sept. 2018 Account Receivable dr. ৳ 15,000.00
Cash cr. ৳ 15,000.00
(Sales on account)
30 Sept. 2018 Equipment-Furniture dr. ৳ 35,000.00
Cash cr. ৳ 35,000.00
(Purchase of furniture)
30 Sept. 2018 Rent Expense dr. ৳ 30,000.00
Account Payable cr. ৳ 30,000.00
(Rent expense is not paid yet)
30 Sept. 2018 Salaries Expense dr. ৳ 14,000.00
Account Payable cr. ৳ 14,000.00
(salary expense is not paid yet)
30 Sept. 2018 Owners Drawing dr. ৳ 6,000.00
Cash cr. ৳ 6,000.00
(withdrawal of cash by owner)
30 Sept. 2018 Food Allowance expense dr. ৳ 6,000.00
Cash cr. ৳ 6,000.00
(Food Allowance cost in cash)
30 Sept. 2018 Inventory dr. ৳ 1,200,000.00
Cash cr. ৳ 800,000.00
Account Payable cr. ৳ 400,000.00
(Purchase 2/3 inventory in cash
rest on account)
30 Sept. 2018 Miscellaneous Expense dr. ৳ 6,000.00
Cash cr. ৳ 6,000.00
(paid Miscellaneous Expense in
Cash)
30 Sept. 2018 Freight Expense dr. ৳ 6,000.00
Cash cr. ৳ 6,000.00
(Paid freight expense daily in
cash)
 30 Sept. 2018 Depreciation Expense ৳ 700.00
Accumulated Depreciation Exp. ৳ 700.00
(Depreciation expense is 2% per
month)
Total ৳ 3,272,890.00 ৳ 3,272,890.00

Brishti Varieties Store

General Ledger

Cash
Date Explanation Ref Debit Credit Balance
Sept 30 Owner’s Capital 200000 200000

Sales Revenue 941790 1141790

Account Receivable 15000 1126790

Equipment Furniture 35000 1091790

Owner’s Drawing 6000 1085790

Food Allowance Expense 6000 1079790

Inventory 800000 279790

Miscellaneous Expense 6000 273790

Freight Expense 6000 267790

Owner’s Capital
Date Explanation Ref Debit Credit Balance
Sept 30 Cash 200000 200000
 Sales Revenue
Date Explanation Ref Debit Credit Balance
Sept 30 Cash 941790 941790

Cost of Goods Sold

Date Explanation Ref Debit Credit Balance
Sept 30 Inventory 812400 812400

Inventory
Date Explanation Ref Debit Credit Balance
Sept 30 Cost of Goods Sold 812400 812400

Cash 800000 12400

Accounts Payable 400000 387600

Accounts Receivable
Date Explanation Ref Debit Credit Balance
Sept 30 Cash 15000 15000

Equipment Furniture
Date Explanation Ref Debit Credit Balance
Sept 30 Cash 35000 35000
 Rent Expense
Date Explanation Ref Debit Credit Balance
Sept 30 Accounts Payable 30000 30000

Accounts Payable
Date Explanation Ref Debit Credit Balance
Sept 30 Rent Expense 30000 30000

Salaries Expense 14000 44000

Inventory 400000 444000

Salaries Expense
Date Explanation Ref Debit Credit Balance
Sept 30 Accounts Payable 14000 14000

Owner’s Drawing
Date Explanation Ref Debit Credit Balance
Sept 30 Cash 6000 6000

Food Allowance Expense

Date Explanation Ref Debit Credit Balance
Sept 30 Cash 6000 6000
 Miscellaneous Expense
Date Explanation Ref Debit Credit Balance
Sept 30 Cash 6000 6000

Freight Expense
Date Explanation Ref Debit Credit Balance
Sept 30 Cash 6000 6000

Depreciation Expense
Date Explanation Ref Debit Credit Balance
Sept 30 Accumulated Depreciation - 700 700
Equipment

Accumulated Depreciation- Equipment

Date Explanation Ref Debit Credit Balance
Sept 30 Depreciation Expense 700 700
 Brishti Varieties Store
Trial Balance
September 30, 2018
Sl. No. Accounts Debit Credit

1. Cash 267790

2. Owner’s Capital 200000

3. Sales Revenue 941790

4. Cost of Goods Sold 812400

5. Inventory 387600

6. Accounts Receivable 15000

7. Equipment Furniture 35000

8. Rent Expense 30000

9. Accounts Payable
444000
10. Salaries Expense 14000

11. Owner’s Drawing 6000

12. Food Allowance Expense 6000

13. Miscellaneous Expense 6000

14. Freight Expense 6000

15. Depreciation Expense 700

16. Accumulated Depreciation Equipment

700
Total 1586490 1586490
 Financial Statements

Brishti Varieties Store

Income Statement
For the Month ended September 30, 2018
Particulars Amount Amount
Revenues:
Sales Revenue 9,41,790
Less: Cost of goods sold 8,12,400
Gross Profit 1,29,390

(-) Others Expenses:

Rent expense 30,000
Salaries & wages expense 14,000
Food allowance expense 6,000
Freight expense 6,000
Miscellaneous expense 6,000
Depreciation expense 700
Total expenses (62,700)

Net Income 66,690

 Brishti Varieties Store
Owner’s Equity Statement
For the Month ended September 30, 2018
Particulars Amount Amount
Md. Salah uddin’s Capital 2,00,000
Add: Net income 66,690
2,66,690
Less: Md. Salah uddin’s Drawing (6,000)
Owner’s capital, September 30 2,60,690

Brishti Varieties Store

Balance Sheet
September 30, 2018
Particulars Amount Amount
Assets
Cash 2,67,790
Account receivable 15,000
Inventory 3,87,600
Equipment 34,300
Less: Depreciation-equipment (35,000-700)

Toal Asset 7,04,690

Liabilities & OE
Account payable 4,44,000
Owner’s Equity, September 30 2,60,690
Total Liability & OE 7,04,690
 Comparison between Recording Process Followed by The
Organization and Recording Process Followed by Us
SI Organization’s Recording Process
No.
1 Brishti varieties store does not follow
the recording process according to the
accounting principles.
2 They do not write specifically the
monthly transaction.
3 They don’t prepare journal.
4 They do not prepare general ledger.
5 They do not prepare trial balance.
6 They do not make any income
statement.
7 They do not prepare owner’s equity
statement.
8 They do not prepare balance sheet.
Our Recoding Process
We follow recording process by
following the accounting principles.
By following their information we have
wrote down monthly transaction.
We have prepared journal.
According to the journal We have
prepared ledger.
We have made trial balance.
We have made income statement.
We have made owner’s equity statement
to see the owner’s capital at the end of
that month.
We prepare balance sheet to make it sure
that his asset is equal to liabilities &
owner’s equity.
 Findings
 Brishti varieties store does not follow the recording process according to the rule of accounting
principle. They have their own process to record their daily sales.
 They don’t have a separate record book for every product they sales.
 They don’t have the record for transaction they made during buying products. That’s why they
don’t know specifically that how much bill is due to which company.
 They don’t write down specifically their monthly transactions.
 The organization doesn’t make any general journal.
 They don’t prepare any general ledger.
 They don’t prepare the trial balance.
 They don’t have any financial statement in their recording notebook.
 They do not prepare the income statement. That’s how they don’t know how much their exact
income is after the end of the each month.
 Brishti varieties store owner doesn’t know his equity at the end of the moth because they don’t
prepare owners equity statement.
 In their recording process they have shown the withdrawal of money by the owner as expense.
 They don’t know what the value of his exact assets is after the end of the month and what his
liabilities are because Md. Salah uddin the owner of the Brishti varieties store doesn’t prepare
Balance sheet after end of the month.
 Recommendations
 The organization should follow the recording process properly. They should follow the
rules of accounting principles to record the transactions.
 They should record their each and every transaction properly in daily basis.
 They should use a notebook for their daily purchase. There they should write clearly that
how much product they purchase from which company and how much they pay in cash
and how much is on account.
 They should write down their monthly transaction after the end of the month that’s how
they can prepare a journal.
 It’s important for them to prepare a general journal.
 After that they should prepare general ledger for every transaction take place during month.
 Then they should prepare the trail balance.
 The organization should prepare their financial statements properly.
 They should prepare the income statement according to the rules of accounting principles.
 They should prepare the statement of owner’s equity.
 At last the organization should prepare a balance sheet to know whether its asset is equals to his
liabilities & equity.

Conclusion
In sole proprietorship business like grocery shop record keeping process allows business owners
recording the daily financial transactions in an accounting system. It also allows business owners
to precisely track their income and expenses, which is necessary for creating accurate financial
statements and analyzing important financial activity. Brishti varieties store doesn’t follow any
accounting principle to record their monthly transaction. According to their recording data we
have made transactions, journal, ledger, trail balance and financial statements. They should
follow the accounting principles to record their transaction. That’s how they will able to
calculate their sales revenue, income, equity very easily. After a certain period of time when they
need any previous information, they can find it very easily. Now, if they follow the accounting
process they will able to their exact business scenario and can run his business smoothly.
 Appendix

 I have attached the visiting card of the organization below

 Other Pictures of their recording process is showing from the next page.