BA3LC920- Recording Business Transactions

This document provides study material and solved assignments for BA3LC920- Recording Business Transactions. It covers topics such as effective decision making, benefits and drawbacks of using accounting information, journal entries, and the impact of the COVID-19 pandemic on the income statement. The document also includes references for further reading.

BA3LC920- RECORDING
BUSINESS
TRANSACTIONS

Table of Contents
Table of Contents.............................................................................................................................2
PORTFOLIO 1.................................................................................................................................3
MAIN BODY...................................................................................................................................3
Task 1...............................................................................................................................................3
a...................................................................................................................................................3
b...................................................................................................................................................3
Task 2...............................................................................................................................................3
Journal entries.............................................................................................................................3
Task 3...............................................................................................................................................5
Journal entries.............................................................................................................................5
Task 4...............................................................................................................................................8
a...................................................................................................................................................8
b...................................................................................................................................................9
REFERENCES..............................................................................................................................11

PORTFOLIO 1
MAIN BODY
Task 1
a
For the success of the business the most important thing is effective decision making as if
the management of company is not able to make effective decision than this will have a great
impact over the working of company (Bunget and et.al., 2020). Thus, for the top management
and other important stakeholders of the company as they have to take effective decision for the
better working of the company. For company like Tesco the major decision makers are the
shareholders, government, employees of the company. Thus, for this the decision makers use the
accounting information in order to manage the work in effective manner. All these decision
makers of Tesco analyses the accounting information and then this assist company in taking
more decision for the better working of company.
b
With reference to the working of company there are many benefit and drawbacks which the
company and the accountant faces in order to manage their work. the major advantage of using
the accounting information by the accountant is that this provides a clear view to the accountant
that how they can make the use of accounting information and take effective decision.
But the major disadvantage seen by the accountant is that it is not possible that the company is
having all the knowledge relating to the accounts and this might be possible that the company
might not understand what the company is and what the actual position of the company is
(Fairlie, 2020).
Task 2
Journal entries
Journal of David Wise for the month February 2020

Date Details Fol DT CT
Feb
1
Cash a/c
To purchase return a/c
(Being office furniture returned to supplier)
350
350
Feb
4
Bad debt a/c
S. keyes a/c
(Being S. Keyes written off as bad debt)
85
85
Feb
9
Machinery a/c
To Bank a/c
To TS. Co a/c
(Being machinery purchased and some
payment being paid by cheque)
2300
200
2100
Feb.
13
Cash a/c
Bed debt a/c
To S. Hill
(Being some part of cash received and rest
settled as bad debt)
220
50
270
Feb
20
Drawing a/c
To stock
(Being goods taken for personal use)
180
180
Feb.
26
Drawing a/c
To cash
(Being amount of money paid for personal
expenses)
85
85
Feb
28
TS co a/c
To bank
(Being half amount paid to TS co by issuing
cheque)
1050
1050

Task 3
Journal entries
Journal of Pearce & sons for the month February 2020
Date Details Fol DT CT
Feb
1
Bank a/c
Van a/c
Office fixtures
To capital
21500
25000
800
47300
Feb
2
Cash a/c
To loan from bank
2500
2500
Feb
3
Cash in hand a/c
Bank a/c
1500
1500
Feb
4
Van a/c
Bank a/c
4800
4800
Feb
5
Office fixture a/c
Quick office ltd
1100
1100
Feb
8
Van a/c
Nissan co.
5200
5200
Feb
15
Office fixture a/c
Cash a/c
70
70
Feb
19
Nissan co.
Bank a/c
5200
5200
Feb
25
Bank a/c
Cash a/c
350
350
Feb
28
Office fixture a/c
Bank a/c
620
620
Bank a/c
Date Details JF Amount Date Details JF Amount

Feb 1 To capital 21500 Feb 3 By cash in hand 1500
Feb 25 To cash a/c 350 Feb 4 By van a/c 4800
Feb 19 By Nissan 5200
Feb 28 By office furniture 620
By bal c/f 9730
Total 21850 Total 21850
Van a/c
Date Details JF Amount Date Details JF Amount
Feb 1 To capital 25000
Feb 4 To bank 4800
Feb 8 To Nissan co. 5200 By bal. c/f 35000
Total 35000 Total 35000
Office fixtures a/c
Date Details JF Amount Date Details JF Amount
Feb 1 To capital a/c 800
Feb 5 To quick office ltd 1100
Feb 15 To cash 70
Feb 28 To bank 620 By bal. c/f 2590
Total 2590 Total 2590
Capital a/c
Date Details JF Amount Date Details JF Amount
Feb 1 By bank 21500
By van 25000
To bal c/f 47300 By office fixture 200

Total 47300 Total 47300
Cash a/c
Date Details JF Amount Date Details JF Amount
Feb 2 To loan from bank 2500 Feb 15 By offices fixtures 70
Feb 3 To bank 1500 Feb 25 By bank 350
By bal c/f 3580
Total 4000 Total 4000
Loan from bank
Date Details JF Amount Date Details JF Amount
By bal. c/f 2500 Feb 2 By cash 2500
Total 2500 Total 2500
Quick office ltd
Date Details JF Amount Date Details JF Amount
By bal c/f 1100 Feb 5 By office fixtures 1100
Total 1100 Total 1100
Nissan co
Date Details JF Amount Date Details JF Amount
Feb 19 To bank a/c 5200 Feb 8 By van 5200
Total 5200 Total 5200
Trial balance

Trial Balance of _______________________ as at
_____________________________________
Details Debit Credit
Bank a/c 9730
Van 35000
Office fixtures 2590
Capital 47300
Cash 3580
Loan 2500
Quick office Ltd 1100
Total 50900 50900
Task 4
a
Particulars Amount
Sales 80000
Less: sales return 2000
Net sales 78000
Less: cost of goods sold 66120
opening stock 36000
Add: purchases (150000-600) 149400
Add: carriage inward 720
Less: closing stock 120000
Gross profit 11880
Expenses:
Motor expenses 1200
Carriage outward 400
Rent 5000
Telephone charges 620
Wages and salaries 32000
Insurance 830

Office expenses 600
Sundry expenses 300
Total expenses 40950
Net profit/loss -29070
With the above profit and loss account it is clear that the company is suffering a loss of amount
29070. This is majorly because of the reason that then expenses of the company has increased
and because of this the profit of company has reduced and been converted into loss for the
company. This loss can be minimised by the company by either reducing the expenses or try tp
increase the sales and other income of the company. This is particularly if the sales will increase
then automatically the profits will also increase and if the expenses will be reduced the also the
income of the company can increase which will result in the increase in the profits of the
company.
b
With the current pandemic there was a great impact over the income statement of the company as
this pandemic had a great impact over the working of company.
Political- this factors had a lot of impact over the working of company and this is particularly
because of the reason that due to pandemic the government has restricted many of the trades and
imposed many restriction over the inter- country trades. This is particularly because of the reason
that when there will be restriction then this will have a great impact over the working of the
company.
Economic factor- this is also a great impact over the working of the company and the income
statement. This is particularly because of the reason that because of this pandemic there was a
great economic slowdown and this had a lot of impact over the working of the company. Thus,
this had a great impact over the working of the company and the income statement of company.
Social factor- this factor also had a great impact over the working and income statement as
because of pandemic the mind and perception of the consumers was in negative manner (Su,
Yang and Dutta, 2018). This is particularly because of the reason that because of pandemic the
consumer trusts of employees have decreased.
Technological- this is a factor which involves the changes taking place in the technology sector
and if this will not be managed in effective manner then this will have a great impact over the

business. Further because of pandemic there is a technological slowdown and this had a great
impact over the income statement of the company.
Legal factor- This is a major factor which involves the different types of the laws and rules and
regulations which have a great impact over the working of company. With respect to the current
pandemic there is a great impact and increase in the laws and rules and regulations which has a
great impact over the working of company (Joung and Lee, 2017).
Environmental factor- this is particularly essential and has a great impact over the working of the
company and income statement. This is particularly because of the reason that when the
pandemic situation is going on then this has a great impact over the working of the company.
The company has to incur a lot of money in taking care of the company and the society and the
overall environment. Thus, this will increase the cost of the company to a great extent.
In the end it can be said that it is very important for the company to manage the external factors
as this has a lot of impact over the working and running of the company and the income
statement to a great extent.

REFERENCES
Books and Journals
Bunget, O.C., and et.al., 2020. Opinions Regarding the Impact of the COVID-19 Pandemic over
the Financial Reporting. CECCAR Business Review. 1(7). pp.11-18.
Fairlie, R.W., 2020. The impact of Covid-19 on small business owners: Evidence of early-stage
losses from the April 2020 current population survey (No. w27309). National Bureau of
Economic Research.
Joung, J.W. and Lee, S.H., 2017. The effect of information asymmetry between accounting
information provider and users on information user decision. Journal of Convergence
for Information Technology. 7(2). pp.125-130.
Su, R., Yang, Z. and Dutta, A., 2018. Accounting information comparability and debt capital
cost empirical evidence from Chinese listed companies. Asian Economic and Financial
Review. 8(1). pp.90-102.