Accounting and Decision Making: A Study on Financial Performance and Business Structures

assessment
Table of Contents

INTRODUCTION.................................................................................................................................3
Part 1.....................................................................................................................................................3
Decision makers................................................................................................................................3
Advantage and disadvantage of any two business structure...............................................................4
Part 2.....................................................................................................................................................4
Journal entries....................................................................................................................................4
Part 3.....................................................................................................................................................5
Transactions in general ledger...........................................................................................................5
Task 4..................................................................................................................................................10
Income statement.............................................................................................................................10
Impacts of COVID 19 Outbreak......................................................................................................11
REFERENCES....................................................................................................................................13
INTRODUCTION
Accounting is denoted as representing the financial position of the organisation in the
accounting books of accounts. This project would emphasis over the key decision makers in

respect to the accounting books of accounts of an organisation. This project would highlight
advantages and disadvantages of any two of profit making business organisation. This project
would also guide about the journal entries of the certain transactions. Furthermore, in this
project reporting will be done in regards to the transaction in general ledger of S Keyes.
Income statement will be draft of S Keyes. Possible impacts of COVID 19 outbreak will also
shown over the income and financial position of the organisation.
Part 1
Decision makers
Accounting is about to record, analyse and summarises the transactions of accounting
books so that crucial decisions can make in respect to the business operations of company.
All decisions different stakeholders make are based on information stated in the company’s
books of accounts. As it is stated that financial performance of company is identified based
on the accounting books of accounts. Especially in a big company like Marks and Spencer
where allot of risk also get involved in the business operations as the organisation contain
heavy investment of company’s financial resources. Different stakeholders such as investors,
shareholders, suppliers, government and all different stakeholders assess these financial
statements to make the best possible decision in favour of their individual interest. Financial
statements are the true state of affairs in respect to the business organisation and project the
exact financial position of the company (Ariana, Bagiada and Sukayasa, 2018). Decision
makers such as shareholders take decision in respect to sustaining the shareholding in the
organisation and other stakeholders like investors that take decision in respect to investing in
company’s affairs and other stakeholders like management that take all decisions related to
the operations of company based on the projection of company’s books of accounts.
Accounting books of account and financial statements such as income statement and balance
sheet of company highlight that how effective the organisation could perform in the
respective financial year (Zeff, 2018). Further these statement show statistics in respect to the
profitability of company. Shareholders get the complete assurance about the company’s
operations and affairs as it denote how effective the company could perform against the
business operations undertaken by organisation. Investors get the complete aim about the
financial stability of the organisation as they need the complete assurance in respect to the
financial stability and strength of company before making any type of decision in respect to
investing in company’s operations.

Advantage and disadvantage of any two business structure
Financial records are the true projection related to company’s financial performance
in market. Profitable business structures allow the stakeholders to make positive decision in
favour of the organisation. The readers of company’s financial statements become more
capable to take the best level of decisions in respecting to doing some kind of affairs with the
respective organisation. Accounting books of account and financial transactions give a clear
insight about the company’s financial stability. Companies like Marks and Spencer and Tesco
are in profitable position based on the information depict in the company’s books of
accounts. It allows the company in talking advantages by attracting all different stakeholders
to entertain business operations with the organisation (İdil and Akbulut, 2018). Financial
statements also get benefited to the organization in case they hold profitable business
operations to approach other stakeholders associated with company’s business to enhance the
growth and profitability of company.
Accounting books of accounts are further associated with the certain disadvantages.
Many times company do not project the exact financial transactions in case if certain
transaction contain fractional amount that company record the transaction by rounding off the
overall amount of the transaction. In order to record much transaction this practice
implements which resist the organisation to record the exact financial position of the
organisation (Nigrini, 2016). It is also possible that companies use different approaches to
record the same transaction which also reflect the inappropriate results by comparing the
financial position of both these companies.
Part 2
Journal entries
Date Particular Debit Credit
Feb 1 Cash a/c
To office fixtures a/c
350
350
Feb 4 Bad debt a/c
S. keyes a/c
85
85
Feb 9 Machinery a/c 2300