Recording Business Transactions

This document provides an overview of recording business transactions and its importance in financial reporting and decision-making. It discusses the decision makers and their need for accounting information. It also explores the advantages and disadvantages of for-profit business structures. The document includes examples of journal entries, trial balance, and an income statement. Additionally, it discusses the possible impact of Covid-19 on income statements.

Recording Business Transactions

Contents
Introduction.................................................................................................................................................3
MAIN BODY.................................................................................................................................................3
ASSESSMENT 1....................................................................................................................................3
PART 1....................................................................................................................................................3
Part 2.......................................................................................................................................................5
Part 3.......................................................................................................................................................7
Part 4.....................................................................................................................................................11
REFERENCES..............................................................................................................................................13

Introduction
Accounting entails monitoring, categorising, revising and displaying money transfers by an
entity. These documents and the results collected from each other just provide basis for
evaluating financial reports and the position of the company (Bansal and Sunkara, AppDynamics
LLC, 2015). This assessment affects the processing of tax reports by separate entities and the
development of trial notes and revenue statements. Benefits and limitations are specified in
manufacturing corporations' taxation. The effect on business earnings of Covid-19 is also
addressed.
MAIN BODY
ASSESSMENT 1
PART 1
(a) Who are the decision makers referred to in the above definition and explain their need for
accounting information.
Manager- Executives are also asked to take steps so that conflicts can be addressed.
Decision-making and problem-solving require ongoing processes in which situations or
concerns are analyzed, options discussed, decisions taken and necessary measures taken
(Hyoseok and Shinde, Rakuten Inc, 2016). The method of decision-making is always
very brief and the cognitive analysis is almost instantaneous. In certain cases, the
procedure can take weeks or months. The whole judgment process depends on the best
information available to the relevant individual at the right time. Managers take crucial
decisions pertaining to multiple kinds of aspects in the sense of the above business.
Role of accounting information- Management Accounting Reporting is designed to help
the firm's administrators, while accumulation research is directed at providing non-
organizational parties with financial data.

Owner- In order to take corrective decisions, the company owner often plays a crucial
role. Key firms usually guide the judgment method, work closely with additional owners,
fix challenges, delegate assignments to other members or team leaders (if required),
complete the task, have the final approval authority (if / when used) and are generally
accountable for the success of the different components. Tesco plc's owner plays a crucial
part in decision-making. They analyze key accounting data.
Role of accounting information- Accounting offers significant financial information of
relevance to decision-making for management and other stakeholders. Assessment of the
function of the owner in preserving and managing the organization's profits. Decide
whether company money is lent or invested.
(b) Identify and explain the advantages and disadvantages of any two for profit business
structures which an accountant may encounter.
Accounting- Accounting is the system of reporting of cash activities involved with
companies. The reporting protocol demands that these operations be summarized,
checked and reported to supervisory authorities, authorities and tax collectors (Ellis,
Onstream Media Corp, 2016). The profit corporation describes some benefits and
drawbacks below:
Benefits:
Full and Systematic Record- Accounting relies on generally accepted norms and on the
empirical means by which accounts represent corporate transactions. For example, all
corporate operations are periodically and thoroughly registered. As any sale can be
reported and evaluated by the same means, the human limitations that cannot be taken
into consideration in all transactions are overcome by reporting.
Helps to collect loans- Business must have sufficient capital for further expansion.
Occasionally, because of the shortage of capital, the organization could not do well. In
such situations, by taking loans from other institutions such as banks, more funds may be
collected. These commercial banks offer loans on the basis of the business entity's

feasibility and legitimacy. The Exchange and Profit & Expense Report and cash balances,
the final analyses of financial documents, will measure the productivity and authenticity.
Accounting relies on generally accepted conventions and the empirical means by which
books represent corporate activities. For example, all business operations are periodically
and thoroughly recorded. As any sale can be reported and evaluated by the same process,
the human limitations that cannot be taken into consideration in all transactions are
overcome by accounting (Gordon, 2015).
Drawbacks:
The Accounting Process develops and submits many solutions to solve a concern prior to
administration. The director can select any choice from the many options that are
available, and even drop them all. Consequently, accounting should only provide data
and no interference is prescribed.
Preference to Logical Decision Making- Analytical decisions can be taken with the help
of accounting methods. Often accounting firms and senior managers, however, favor
prior judgment expertise and insight. This is because taking an intuitive decision is
genuinely transparent and easy.
One of the most significant limitations of accounting practices is that it only applies to
corporate level of compliance (Levin and Light, 2015). Multiple options, including such
business conditions, political climate, regulatory and regulatory rules, etc., have significant
implications for industry practices. They are not mentioned in financial information and
have an inaccurate reputation when making solid business decisions.
Part 2
A. Journal Entries for the month of February 2020
Date Particulars Debit (£) Credit (£)

01/02/20 Asma Ltd. A/c..........................Dr.
To Office fixtures A/c
(Unsuitable office fixtures returned to Asma
Ltd.)
350
350
04/02/20 Bad debt A/c............................Dr.
To S. Keyes
(Debt from S.Keyes written off as bad)
85
85
09/02/20 Machinery A/c.........................Dr.
To Bank A/c
To TS Co. A/c
(Machinery bought from TS Co. on part cash
and part credit)
2300
200
2100
13/02/20 Bank A/c...................................Dr.
Bad debt A/c.............................Dr.
To S. Hill A/c
(Only £220 received out of £270 from
bankrupt debtor S. Hill as full and final
settlement)
220
50
270
20/02/20 Drawings A/c............................Dr.
To Purchases A/c
(Goods taken for personal use by owner)
180
180
26/02/20 Drawings A/c..........................Dr.
To Insurance A/c
(Personal insurance bill debited to business
not stands corrected)
85
85
28/02/20 TS Co. A/c..............................Dr.
To Bank A/c
(Half payment of machine credit paid by
owner to TS Co)
1050
1050

Part 3
A. General ledger
Ledger Accounts
(Amounts in GBP)
Capital Account
Date Particulars Amount Date Particulars Amount
01/02/20 By Bank A/c 21500
01/02/20 By Van A/c 25000
01/02/20 By Office Fixture A/c 800
29/02/20 To Balance c/f 47300
Total 47300 Total 47300
Bank Account
Date Particulars Amount Date Particulars Amount
03/02/20 By Cash A/c 1500 01/02/20 To Capital A/c 21500
04/02/20 By Van A/c 4800 02/02/20 To Loan A/c 2500
19/02/20 By Nissan Co. A/c 5200 25/02/20 To Cash A/c 350
28/02/20 By Office Fixture A/c 620

29/02/20 By Balance c/f 12230
Total 24350 Total 24350
Van Account
Date Particulars Amount Date Particulars Amount
01/02/20 To Capital A/c 25000
04/02/20 To Bank A/c 4800
08/02/20 To Nissan Co. A/c 5200
29/02/20 By Balance c/f 35000
Total 35000 Total 35000
Quick Office Ltd Account
Date Particulars Amount Date Particulars Amount
05/02/20 By Office Fixture A/c 1100
29/02/20 To Balance c/f 1100
Total 1100 Total 1100
Cash Account
Date Particulars Amount Date Particulars Amount
15/02/20 By Office Fixture A/c 70 03/02/20 To Bank A/c 1500

25/02/20 By Bank A/c 350
29/02/20 By Balance c/f 1080
Total 1500 Total 1500
Nissan Co. Account
Date Particulars Amount Date Particulars Amount
08/02/20 By Van A/c 5200 19/02/20 To Bank A/c 5200
Total 5200 Total 5200
Office Fixture Account
Date Particulars Amount Date Particulars Amount
01/02/20 To Capital A/c 800
05/02/20 To Quick Office Ltd A/c 1100
15/02/20 To Cash A/c 70
28/02/20 To Bank A/c 620
29/02/20 By Balance c/f 2590

Total 2590 Total 2590
Loan Account
Date Particulars Amount Date Particulars Amount
02/02/20 By Bank A/c 2500
29/02/20 By Balance c/f 2500
Total 2500 Total 2500
B. Trial Balance as at 28th Feb 2019
Trial Balance
(at the month ending 29/02/2020)
(Amounts in GBP)
Particulars Debit Credit
Capital Account 47300
Bank Account 12230
Cash Account 1080
Van Account 35000
Quick Office Ltd. Account 1100

Office Fixture Account 2590
Loan Account 2500
Total 50900 50900
Part 4
A. Income Statement for the year ending 30th Sept 2019
Profit and Loss Account
(for the year ending 30th Sept 20)
Particulars Amount Particulars Amount
Opening Stock 36000 Sales 80000
Purchases 150000 Less: Returns Inwards -2000 78000
Less: Returns Outwards -600 149400 Closing Stock 120000
Carriage Inwards 720
Gross Profit c/f 11880
Total 198000 Total 198000
Carriage Outwards 400 Gross Profit c/d 11880
Motor Expenses 1200
Rent 5000

Telephone Charges 620
Wages and Salaries 32000
Insurance 830
Office Expenses 600
Sundry Expenses 300
Net profit / (loss) -29070
Total 11880 Total 11880
B. Possible impact of Covid-19 on Income statements
The global effects of CoVIDE-19 (Corona virus), which in fact seems to have such a deeply
detrimental effect on persons, families, businesses and regimes, that everyone needs to know
what their empirical analysis is about (Trigo, Belfo and Estébanez, 2016). The influence of
Covid-19 on all facets of society that may include social, financial or regional issues and which
in any individual states may take time and cost to function normally. As we talk, the outbreak is
rising and we are in such an area where we do not know how deep they are likely to go. Some
objects which are influenced by COVID are listed below:
Lack of revenue-This can be seen in the previous argument where there is less sales value
relative to expenditures. This is attributed to the detrimental effect of COVID 19 on the revenues
of businesses.
Higher returns- Owing to lack of quality, there are larger numbers of items returned by
consumers. This reveals COVID's negative effect.
Higher pay-The wages are 32,000 pounds, which means that this sum was charged by the
business from its profits which contributes to poorer output.

REFERENCES
Bansal, J. and Sunkara, B., AppDynamics LLC, 2015. Conducting a diagnostic session for
monitored business transactions. U.S. Patent 9,015,317.
Hyoseok, G.O.N.G. and Shinde, Y., Rakuten Inc, 2016. Notifying device, notifying method,
program and non-transitory recording medium. U.S. Patent Application 15/103,445.
Ellis, G., Onstream Media Corp, 2016. Remotely accessed virtual recording room. U.S. Patent
9,467,728.
Gordon, S., 2015. The Future of the Music Business: How to Succeed with New Digital
Technologies Fourth Edition. Hal Leonard Corporation.
Levin, J.S. and Light, R.S. eds., 2015. Structuring venture capital, private equity and
entrepreneurial transactions. Wolters Kluwer Law & Business.
Trigo, A., Belfo, F. and Estébanez, R.P., 2016. Accounting Information Systems: evolving
towards a business process oriented accounting. Procedia Computer Science, 100,
pp.987-994.