Accounting Assessment: Steps to Start a Business, Financial Accounting for Decision Makers, Journal Entries, Trial Balance, Income Statement and Covid-19 Impact

This assessment covers the steps required to start a business, financial accounting for decision makers, journal entries, trial balance, income statement and Covid-19 impact on profits. It includes suggestions for starting a business, the role of financial accounting for different decision makers, and examples of journal entries and ledger accounts. The income statement is analyzed to determine the impact of Covid-19 on profits.

Accounting
Assessment

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK...............................................................................................................................................3
Part A ..............................................................................................................................................3
Provide suggestions on the steps required to be followed before starting a business.................3
How does financial accounting helps different decision makers of a plc...................................4
Part B ..............................................................................................................................................4
Give the journal entries of F Polk with narrations......................................................................4
Record the entries in general ledger and prepare Trial Balance for Maurice and Brothers........6
Prepare the income statement and analyse the impact of Covid-19 pandemic on the profits.....8
CONCLUSION ...............................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business transactions refers to the financial events that happens in the business. These events
determines the fiscal health of the business. Due to business transactions the firms are able to sell
their goods and services to the customers and earn revenue from same. These business
transactions are required to be properly recorded and analysed during a period which would
ascertain the profits earned by the business in this time. This time period is called the accounting
period or fiscal period (De Girolamo, and et. al., 2019). All the transactions happening in this
period are duly recorded. This report highlights the main entries recorded of a business
mentioned in case. The first part highlights the requirements of starting a business with the major
stakeholders of Morrisons. The part two of this assessment captures the main traditional
accounting process followed by the business like preparation of ledger accounts, trial balance
and income statement.
TASK
Part A
Provide suggestions on the steps required to be followed before starting a business
The case of David green is that, he wants to start a sole proprietorship start up dealing in
the business of decorating.. following are the steps that he might want to consider before starting
a new business.
 The first step to start a business is to formulate a business model which would give
insights to the leaders about the opportunities in the market.
 The entrepreneur in this step has to be clear of the visions and missions of the business
that he they want to take up for the business (Subramanian, and et. al., 2021).
 After forming the strategies, the leaders have to make a business portfolio about the
products and services the business will deal in.
 After deciding the product line, the business now have to decide the long term strategy
for growth that they will follow to hold the competitive edge in the market.
 The business is also required to have an online presence on the social media which
would aid the business in its settlement in the marketplace and gain potential customers.

How does financial accounting helps different decision makers of a plc.
Accounting is a procedure of transcription, evaluating and finalising of the entries which afford
the explanation data and helps in determination – devising. The content of accounting is to yield
the fiscal data about the concern. It help in intentional active the financial point and execution
which can be utilized in taking determination by the users (Wahyuni-TD, 2017). Morrisons is
listed on the London Stock Exchange and many decision-makers and responsible for the place of
the institution in the activity. Acquiring, generation, and the acquisition of long-term point for
adoptive working class and merchandise could be reasoned. Exact data is crucial to pledge that
the organisation is beneficial. Every determination seized in the firm calculate instantly or
directly on the users of Morrisons.
The users of accounting are:
1. Owners: They might check the rate of return complete using explanation information and
measure the consequence of the firm to those of comparable with businesses.
2. Government: The public authority needs accounting information of the undertaking to
gather different kinds of taxes, such as direct and indirect.
3. Management: These are people who figure and make arrangements for the future.. The
plan is made according to the goals of the business. The customers of the accounting
information uses it to plan, control and simply decide. It helps them with evaluating the
presentation and position of the firm.
4. Investors: Before contributing, entrepreneur should survey and examine the monetary
condition using the accounting data of an organisation (Appelbaum, Budnik, and
Vasarhelyi, 2020).
Part B
Give the journal entries of F Polk with narrations
JOURNAL ENTRIES – F POLK
Date Particulars Debit Credit
01/09/21 Assets A/c
Fixtures
Stock
Debtors (105 + 311)
5700
2800
5200
416

Bank
Cash
Creditors (229 + 80)
Capital
(Capital being employed in the business)
1060
85
309
14952
01/09/21 Bad Debts
P Mullen
(Bad Debts written-off)
105
105
05/09/21 Syme Ltd
Office Fixtures
(Office fixtures bought through credit was written-off)
150
150
10/09/21 Bank
Bad Debts
M Abel
(M Abel declared bankruptcy and received the amount
in full settlement)
180
131
311
18/09/21 Machinery
Cash
Bank
Brown Ltd
(Purchased a machinery and the amount paid by
cheque, cash and on credit)
1800
100
500
1200
26/09/21 Brown Ltd
Bank
(Half of the amount due paid through cheque)
600
600
28/09/21 Insurance Expenses
Drawings
Bank
(Insurance expenses paid by bank but later realised that
60
70
130

£70 is of personal house)
Record the entries in general ledger and prepare Trial Balance for Maurice and Brothers
A) General Ledger
Cash Account
Date Particulars Ref Amount Date Particulars Ref Amount
03/08/21 Bank 2800 15/08/21 Office Fixtures 110
19/08/21 Toyota Co. 8700
31/08/21 Balance c/d 6440 25/08/21 Bank 430
9240 9240
Bank Account
Date Particulars Ref Amount Date Particulars Ref Amount
03/08/21 Cash 2800
01/08/21 Capital 36800 04/08/21 Van 6200
25/08/21 Cash 430 05/08/21 Office Fixtures 1000
02/08/21 Loan Payable 12400 28/08/21 Office Fixtures 750
31/08/21 Balance c/d 38880
49630 49630
Van Account
Date Particulars Ref Amount Date Particulars Ref Amount
01/08/21 Capital 32000
04/08/21 Bank 6200 31/08/21 Balance c/d 46900
08/08/21 Toyota Co. 8700
46900 46900

Office Fixtures
Date Particulars Ref Amount Date Particulars Ref Amount
01/08/21 Capital 1200
05/08/21 Bank 1000
05/08/21 Sharp Office Ltd 2400 31/08/21 Balance c/d 5460
15/08/21 Cash 110
28/08/21 Bank 750
5460 5460
Sharp Office (Creditor)
Date Particulars Ref Amount Date Particulars Ref Amount
31/08/21 Balance c/d 2400 05/08/21 Office Fixtures 2400
2400 2400
Toyota Co. Accountable
Date Particulars Ref Amount Date Particulars Ref Amount
19/08/21 Cash 8700 08/08/21 Van 8700
8700 8700
Loan Payable Account
Date Particulars Ref Amount Date Particulars Ref Amount
31/08/21 Balance c/d 12400 02/08/21 Bank 12400

12400 12400
Capital Account
Date Particulars Ref Amount Date Particulars Ref Amount
31/08/21 Office Fixtures 1200
31/08/21 Van 32000 31/08/21 Balance c/d 70000
31/08/21 Bank 36800
70000 70000
b) TRIAL BALANCE
TRIAL BALANCE
Maurice & Brothers
Debit Credit
Bank 38880
Cash 6440
Van 46900
Office Fixtures 5460
Sharp Office Ltd (Creditor) 2400
Loan Payable 12400
Capital 70000
TOTAL 91240 91240
Prepare the income statement and analyse the impact of Covid-19 pandemic on the profits
A) Income Statement- B Moore
Particulars Amount (£)
Sales 95000

Less: Sales Returns 3500
Less: Carriage Inwards 890
Net Sales 90610
Opening Stock 18000
Purchases 110000
Less: Return Outwards 720
Less: Closing Stock 13000
Net Purchases 114280
Motor Expenses 1400
Rent 7000
Telephone Charges 830
Wages and Salaries 14000
Insurance 1030
Office Expenses 800
Sundry Expenses 250
Operating Expenses 25310
TOTALS -48980
B) Analysis related to Covid-19 Pandemic
The year of 2020 has been one of the most challenging year for different businesses. Many
businesses tried to sustain their business but all the efforts went in vain. The businesses have
went below the break-even point, which means they were not even making enough profits to
meet their overheads costs. Like everywhere around the world, the case company had also dealt
with the after-effects of the pandemic (Pirveli, 2019).

After analysing the income statements of the company it can be seen that the company have
suffered a loss in the year 2020. This means that the expenses of the business have exceeded the
revenue earned. The revenue received from the sales was not enough to cover its costs. This was
due to the pandemic that made the consumers demand less products. If the business wants to earn
profits in the year 2022, they need to focus on compensating the loss earned in the 2020 in the
year 2021. They need to at least earn enough that they reach their break-even point. The
company should focus on determining such ways of doing operations that their cost is in hand
and they are sure that they will at least earn for the production (Wang, and et. al., 2019).
CONCLUSION
The above mentioned report can be concluded by mentioning that business strategy is an integral
part of starting and running a business. The books of accounts, ledgers and profit and loss
prepared in the above assessment is evaluating the position of the business for that period. The
net income earned by the business is shown in income statement of profit and loss account. The
stakeholders of Morrisons are also discussed in the report.

REFERENCES
Books and Journals
De Girolamo, A.M.,and et. al., ., 2019. Improving grey water footprint assessment: accounting
for uncertainty. Ecological Indicators. 102. pp.822-833.
Subramanian, K., and et. al., 2021. Advancing neighbourhood sustainability assessment by
accounting for sustainable development goals: A case study of Sha Tin neighbourhood
in Hong Kong. Sustainable Cities and Society. 66. p.102649.
Wahyuni-TD, I.S., 2017. Assessment of fair value accounting from the Islamic
perspective. International Journal of Accounting, Auditing and Performance
Evaluation. 13(4). pp.325-338.
Appelbaum, D., Budnik, S. and Vasarhelyi, M., 2020. Auditing and Accounting During and
After the COVID-19 Crisis. The CPA Journal. 90(6). pp.14-19.
Pirveli, E., 2019. The Ongoing Accounting and Audit Reform in Georgia: First
Assessment. Forbes Georgia. 4(2).pp.82-85.
Wang, M.X., and et. al., 2019. Loss accounting of environmental pollution within Pearl River
Delta region, South China. Environmental Pollution. 249. pp.676-685.