Recording Business Transactions - Desklib

This report discusses the steps to set up a business, including building a business model, making a business strategy, and creating a technology roadmap. It also covers how financial accounting helps in decision-making and who the decision makers are. Journal entries, general ledgers, and income statements are prepared for some transactions. The report also analyzes why the profit has increased and decreased over the years and what will be the estimate of profit in 2022. Tesco is used as an example to analyze decision makers. References are provided for further reading.

Recording Business
Transactions

Table of Contents
INTRODUCTION...........................................................................................................................4
ASSESSMENT 1.............................................................................................................................4
1. Give a consultation on setting of the business in steps............................................................4
2. How the financial accounting helps in decision - making and who are the decision makers..5
1. Depict the journal entries of F Polk as on 1 September..........................................................6
2. Record the General Ledger and Trial Balance of the Maurice and brothers...........................8
3. Prepare income Statement and analyse why the profit has increased and decreased over the
years...........................................................................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
INTRODUCTION.........................................................................................................................14
PART A.....................................................................................................................................14
a) Record the Journal entry in T- accounts................................................................................14
b) GENERAL LEDGERS:........................................................................................................15
c) TRIAL BALANCE................................................................................................................20
d) Balance Sheet........................................................................................................................21
Part – B..........................................................................................................................................21
a) Accounting Ratios.................................................................................................................21
b) Analysis of the performance and impact of COVID – 19 on Anne’s Business....................22
Conclusion.................................................................................................................................22
REFERENCES..............................................................................................................................23
Books and Journals....................................................................................................................23

INTRODUCTION
A business transaction is an economic activity of a company that changes its financial
situation. They are often grouped together in books called journals and ledgers. A journal is a
notebook that you use to record every business transaction that appears on your receipts. You
may need to keep separate logs for general transactions. The General Ledger is a ledger that
contains your journal totals. It is organized into different. In this report it is defined to start a
business as a decorator, but due to indebted circumstances it is necessary to consult on starting a
business. In addition, journal entries, income statements and trial balances are made for some
transactions. Tesco is used in this report to analyze decision makers.
ASSESSMENT 1
PART A
1. Give a consultation on setting of the business in steps.
David Green is a sole proprietor and wants to start his own business as a decorator. David Green
is keen on starting out as an owner decorator and knows he is fully responsible for all of his
business debts. He will also be responsible for certain accounting tasks (Smith and Castonguay,
2020). Even if someone is new to the stages of starting a business, it is a must to follow the steps
described above:
1. Build a business model: To become successful as a decorator, he must first set up a business
model . For example, if he wants to run a sole proprietorship, he needs to be careful about the
pros and cons of the business.
2. Make a business strategy: It is important to make a plan after creating a good model as it will
serve as a guide for the activities in which it will be involved in all aspects, the budget and the
people it will manage subtly.
3. Building an activity portfolio: In particular, an activity portfolio is more than a simple
brochure. It contains detailed information about the objectives, skills and initiatives of the
company. It will contain detailed information on how the projects will be implemented

successfully. It also includes profiles of key people in the organization highlighting their real
work experience, skills and qualifications.
4. Obtaining the necessary equipment: He should receive the necessary equipment for
decoration after establishing the business strategy of what is required (Perry, 2018
Banks, 2018). Before purchasing the necessary tools, he should measure the available space to
make sure everything fits.
5. Create a technology roadmap: A technology roadmap is a strategic tool that combines the
short and long term strategic objectives of an institution with technical options. This will help
him better understand modern technological possibilities, define technological goals and set
deadlines for the introduction of innovative processes.
6. Create accounts on social platforms: Because nowadays most customers prefer to search for
businesses online. David should therefore create a social media profile and a website to increase
the company's online visibility. Use social media sites like Facebook, Instagram, etc. can help
your business stand out, especially if you offer samples of your work in the form of videos or
photos. Customers can also participate in social media by sharing good information and asking
questions. It will help to know the customer and vice versa using social media.
7. Build community networks: It should also try to physically connect with the community by
participating in charitable activities that promote environmental sustainability. Connecting to the
community where the business is based is a win-win scenario (Hahn, 2020). The engagement
will benefit the company. Customers will appreciate the goods and services provided by the
company. It serves as the point of contact between the company and the customer.
This will be the socially responsible image of your company. In this way, the decorator can start
his own business and this will be of great help for the establishment and development of the
business.
2. How the financial accounting helps in decision - making and who are the decision makers.
Accounting concerns with the monitoring, definition, interpretation, analysis and
communication of accounting information to users. The motive of an accounting system is to
provide financial information about the organization. Data related to the financial position and

performance of a business and is literally designed to be used in decision making based on the
number of internal and external users. Managers at all levels of the corporate structure are called
decision makers because they make decisions based on data and accounting facts. TESCO is
listed on the London Stock Exchange and has a number of decision makers who are responsible
for the organization's position in the market (Hirschmeier and Yui, 2018). Long-term asset
acquisitions, incentives and acquisitions for the development of goods and services can be
considered. Accurate information is essential to ensure the long-term profitability of a company's
operations.
Users of Accounting Information:
1. Management: In a large company like TESCO, there is a separation between management
and shareholders. However, both make choices in the best interests of the organization when
considering the investment decisions and initiatives that can be taken
2. Owners: They can examine ROI using accounting information and compare Tesco's results
with different companies.
3. Government: The government needs accounting data from TESCO to collect direct and
indirect taxes.
4. Creditors: It may use accounting data to assess the solvency and solvency of TESCO.
5.Investors: Before investing, capitalists should examine and analyze Tesco's financial situation
using accounting data.
Knowing the exact state of your business is highly vital so that users can make decisions on how
to achieve their business goals, whether against several other companies in the same industry or
against previous years based on accounting information.
PART B
(a) Journal Entries for the month September, 2021
Date Particulars Debit
Amount
Credit
Amount
01/09/2021 Bad Debts A/C Dr.
To P Mullen A/C Cr
(Being debts written off)
105
105

05/09/21 Syme Ltd A/C Dr.
To Office Fixtures A/C Cr.
(being office fixtures returned)
150
150
10/09/21 Cash or bank A/C Dr.
Bad Debts A/C Dr.
To M Abel A/C
(being amount recovered in the full settlement)
180
131
311
18/09/21 Machinery A/C Dr.
To cash A/C cr.
To bank A/C Cr.
To Brown Ltd A/C Cr.
(Being machinery purchased by cash, bank and on
credit)
1800
100
500
1200
26/09/21 Brown Ltd A/C Dr.
To Bank A/C Cr.
(being half amount paid to Brown Ltd)
600
600
28/09/21 Insurance A/C Dr.
Drawings A/C Dr.
To Bank A/C Cr.
(Being insurance paid)
60
70
130
(2)
a. Prepare Ledger Accounts for August, 2021 of Maurice & brothers.
Cash A/C
Particulars Amount
(Debit)
Particulars Amount
(Debit)
To bank A/C
To bank A/C
2800
430
By office fixtures A/C
By balance c/d
110
3120
TOTAL 3230 TOTAL 3230

Bank A/C
Particulars Amount
(Debit)
Particulars Amount
(Debit)
To Satandar A/C
To sharp office A/C
To balance c/d
12400
2400
7050
By cash in hand A/C
By secomd hand van A/C
By office fixtures A/C
By Toyota A/C
By office fixtures A/C
2800
6200
3400
8700
750
TOTAL 21850 TOTAL 21850
Satandar A/C
Particulars Amount
(Debit)
Particulars Amount
(Debit)
To balance c/d 12400 By bank A/C 12400
TOTAL 12400 TOTAL 12400
Second hand van A/C
Particulars Amount
(Debit)
Particulars Amount
(Debit)
To balance c/d 6200 By bank A/C 6200
TOTAL 6200 TOTAL 6200
Office Fixtures A/C
Particulars Amount
(Debit)
Particulars Amount
(Debit)

To bank A/C
To Sharp Office Ltd A/C
To Cash A/C
To Bank A/C
1000
2400
110
750
By balance c/d 4260
TOTAL 4260 TOTAL 4260
Sharp Office A/C
Particulars Amount
(Debit)
Particulars Amount
(Debit)
To bank A/C
To balance c/d
1000
2300
By office fixtures A/C 3400
TOTAL 3400 TOTAL 3400
Van A/C
Particulars Amount
(Debit)
Particulars Amount
(Debit)
To Toyota A/C 8700 To balance c/d 8700
TOTAL 8700 TOTAL 8700
Toyota A/C
Particulars Amount
(Debit)
Particulars Amount
(Debit)
To bank A/C 8700 By van A/C 8700
TOTAL 8700 TOTAL 8700
Trial Balance

Particulars Amount
(Debit)
Amount
(Credit)
Cash A/C 3120
Bank A/C 7050
Satandar A/C 12400
Second hand van A/C 6200
Office fixtures A/C 4260
Sharp office Ltd A/C 2300
Van A/C 8700
Toyota A/C - -
Suspense A/C 11870
TOTAL 27950 27950
3. Prepare income Statement and analyse why the profit has increased and decreased over the
years.
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) Why the profit has decreased and increased over the years and what will be the estimate
of profit in 2022.
For many businesses, the first quarter of 2020 has been one of the most struggling in
recent years. While most companies made stable growth in early 2020, the covid 19 pandemic
created hindrance in the progress in most parts of the world in mid-March. From the disruption
of daily operations to the complete closure of certain stores and departments. According to the
income statement, the company suffered a loss (Hanafizadeh and Nik, 2020). This shows that the
company's expenses have exceeded its income. However, the income of the organization does
not bring in much and it cannot cover its expenses. This could be due to the global pandemic,
which resulted in a drop in demand for goods and services and therefore reduced sales. The
possible consequences are numerous, ranging from small direct effects such as the closure of a
business to relatively long-term indirect effects such as a change in business strategy.
Considering and Understanding the organizational impact and the financial impact is important
for business owners.

CONCLUSION
The conclusion from the above analysis is that preparing a business strategy is the most
important when starting a business. Journaling, general ledger, and income statements describe
the financial condition of a business. The net result is described in the income statement. In this
report, Tesco is obtained, which is listed on the London Stock Exchange.

REFERENCES
Books and Journals
Smith, S. S. and Castonguay, J. J., 2020. Blockchain and accounting governance: Emerging
issues and considerations for accounting and assurance professionals. Journal of
Emerging Technologies in Accounting, 17(1). pp.119-131.
Hanafizadeh, P. and Nik, M. R. H., 2020. Configuration of data monetization: A review of
literature with thematic analysis. Global Journal of Flexible Systems
Management, 21(1). pp.17-34.
Perry, P. J., 2018. Political corruption and political geography. Routledge.
Banks, J., 2018. Monopoly television: MTV's quest to control the music. Routledge.
Hahn, G. J., 2020. Industry 4.0: a supply chain innovation perspective. International Journal of
Production Research, 58(5). pp.1425-1441.
Hirschmeier, J. and Yui, T., 2018. The development of Japanese business, 1600-1980 (Vol. 8).
Routledge.

INTRODUCTION
A business transaction is a process that involves economic development, the entry or exit
of goods, services or cash, changes in quantity or quality, etc (Ujang, Kozlowski and Maulan,
2018). It means an exchange of currencies carried out between two or more parties which may
involve the exchange of services and goods, money, etc.
PART A
a) Record the Journal entry in T- accounts.
JOURNAL ENTRIES
Date Particulars Debit Credit
01/10/21 Bank
Cash
Flat
Car
Capital
10000
4800
45000
12000
71800
02/10/21 Purchases
Home Ltd
5400
5400
04/10/21 Computer
Printer
Bank
800
200
1000
05/10/21 Bank
Sales
2800
2800
12/10/21 Repair Expense
Cash
110
110
18/10/21 Home Ltd.
Purchases
250
250
21/10/21 Bank
Rent Income
800
800
23/10/21 Rayan 300

Cash
Sales
1800
2100
23/10/21 Cash
Sales
700 700
24/10/21 Laptop
Bank
1700
1700
26/10/21 Wages
Bank
820
820
30/10/21 Rent Expenses
Bank
850
850
31/10/21 Drawings
Bank
1200
1200
31/10/21 Cash
Rayan
150
150
b) GENERAL LEDGERS:
Bank
Date Particulars Ref Amount Date Particulars Ref Amount
01/10/21 Capital 10000 04/10/21 Computer 800
21/10/21 Rent 800 04/10/21 Printer 200
05/10/21 Sales 2800 24/10/21 Laptop 1700
26/10/21 Wages 820
30/10/21 Rent 850
31/10/21 Drawings 1200
31/10/21 Balance c/d 8030

13600 13600
Cash
Date Particulars Ref Amount Date Particulars Ref Amount
01/10/21 Capital 4800 12/10/21 Repair 110
23/10/21 Sales 1800
23/10/21 Sales 700
31/10/21 Rayan 150 31/10/21 Balance c/d 7340
7450 7450
Flat
Date Particulars Ref Amount Date Particulars Ref Amount
01/10/21 Capital 45000
31/10/21 Balance c/d 45000
45000 45000
Car
Date Particulars Ref Amount Date Particulars Ref Amount
01/10/21 Capital 12000
31/10/21 Balance c/d 12000
12000 12000
Capital
Date Particulars Ref Amount Date Particulars Ref Amount
01/10/21 Bank 10000
01/10/21 Cash 4800

01/10/21 Flat 45000
31/10/21 Balance c/d 71800 01/10/21 Car 12000
71800 71800
Purchases
Date Particulars Ref Amount Date Particulars Ref Amount
18/10/21 Home Ltd 5400 02/10/21 Home Ltd 250
31/10/21 Balance c/d 5150
5400 5400
Home Ltd
Date Particulars Ref Amount Date Particulars Ref Amount
02/10/21 Purchases 250 18/10/21 Purchases 5400
31/10/21 Balance c/d 5150
5400 5400
Computer
Date Particulars Ref Amount Date Particulars Ref Amount
04/10/21 Bank 800
31/10/21 Balance c/d 800
800 800
Printer

Date Particulars Ref Amount Date Particulars Ref Amount
04/10/21 Bank 200
31/10/21 Balance c/d 200
200 200
Repair Expenses
Date Particulars Ref Amount Date Particulars Ref Amount
12/10/21 Cash 110
31/10/21 Balance c/d 110
110 110
Rent
Date Particulars Ref Amount Date Particulars Ref Amount
21/10/21 Bank 850 30/10/21 Bank 800
31/10/21 Balance c/d 50
850 850
Rayan
Date Particulars Ref Amount Date Particulars Ref Amount
23/10/21 Sales 300 31/10/21 Cash 150
31/10/21 Balance c/d 150

300 300
Sales
Date Particulars Ref Amount Date Particulars Ref Amount
05/10/21 Bank 2800
23/10/21 Rayan 300
31/10/21 Balacne C/d 5600 23/10/21 Cash 1800
23/10/21 Cash 700
5600 5600
Laptop
Date Particulars Ref Amount Date Particulars Ref Amount
24/10/21 Bank 1700
31/10/21 Balance c/d 1700
1700 1700
Wages
Date Particulars Ref Amount Date Particulars Ref Amount
26/10/21 Bank 820
31/10/21 Balance c/d 820
820 820
Drawings
Date Particulars Ref Amount Date Particulars Ref Amount

31/10/21 Bank 1200
31/10/21 Balance c/d 1200
1200 1200
c) TRIAL BALANCE
Particulars Debit Credit
Bank 8030
Cash 7340
Flat 45000
Car 12000
Capital 71800
Purchases 5150
Home Ltd 5150
Computer 800
Printer 200
Repair Expenses 110
Rent 50
Rayan 150
Laptop 1700
Wages 820
Drawings 1200
Sales 5600
TOTALS 82550 82550

d) Balance Sheet
Assets Amount Liabilities Amount
Bank
Cash
Car
Computer
Laptop
Closing stock
Suspense Account
8030
45000
12000
800
1700
320
10300
Capital
Home ltd
Drawing
71800
5150
1200
71850 71850
e) It is necessary to inform Linda that an amount of £ 1200 has been paid into the company's
bank account to book hotels and flights in Scotland for her vacation (Ellis, ed., 2019). Therefore,
this is considered as a drawing because money was taken from a bank account that was paid for
Anne York's vacation. Also, it can be considered that any kind of expense incurred which is for a
personal trip is considered as drawings of the business.
Part – B
a) Accounting Ratios
 Current Ratio: The current ratio is a liquidity ratio that measures a company's
ability to generate enough resources to meet its short-term financial obligations. It
is one of the most common and important ratios calculated by many organizations
to check the financial liquidity position of the company (Ramachandran and
Kakani, 2020).
Formula Calculation
Current Assets/Current Liabilities 45000/1200 = 37.5

 Acid Test Ratio: This ratio is used to compare a company's quick assets with its
current liabilities (Bauer, 2019). It helps determine the company's ability to pay its
due invoices. This ratio helps in keeping a check on the quick assets of the business
organization so that there is constant check on the liquidity position of the
company.
Formula Calculation
Quick assets/current liabilities 45000-320 / 1200 = 37.23
b) Analysis of the performance and impact of COVID – 19 on Anne’s Business.
The performance of Anne's Business can be considered very positive compared to the
indices of the competitors (Tesón, 2018). The company has a high amount of current assets
relative to its current liabilities, indicating that the company is in a strong financial position
compared to the average of its competitors. Therefore, to be able to stay in the competition,
Anne's turnover is likely to be high.
The outbreak of the global pandemic somehow significantly affected the business
operations of the company, resulting in a decrease in profit margin. This ultimately
revealed a decline in the company's profits (Prewett, Prescott and Phillips, 2020). It is
strongly recommended that the relevant company conduct business in the post-corona era.
Some new and different changes need to be adopted by the business so that it can stay on
track with high profits. Once market situations are normalized, it automatically improvises
itself to run the business in the most efficient manner, which will ultimately lead the
business on the path to success.
Conclusion
From the above study, it can be concluded from the assessment second that it is important
for a business organization to correctly record all transactions of business activities in
different defined formats. Creating a journal account, general ledger account, balance sheet
statement, and then performing accounting ratios analysis helps to keep all transactions
correctly recorded. It assists in analysing a company's financial situation easier, simpler and
better.

REFERENCES
Books and Journals
Ujang, N., Kozlowski, M. and Maulan, S., 2018. Linking place attachment and social interaction:
towards meaningful public places. Journal of Place Management and Development.
Ellis, J. ed., 2019. Corruption, Social Sciences and the Law: Exploration across the disciplines.
Routledge.
Ramachandran, N. and Kakani, R. K., 2020. Financial Accounting For Management|. McGraw-
Hill Education.
Bauer, J. C., 2019. Upgrading Leadership's Crystal Ball: Five Reasons why Forecasting Must
Replace Predicting and how to Make the Strategic Change in Business and Public
Policy. Productivity Press.
Prewett, K. W., Prescott, G. L. and Phillips, K., 2020. Blockchain adoption is inevitable—
Barriers and risks remain. Journal of Corporate accounting & finance, 31(2). pp.21-28.
Tesón, F. R., 2018. A philosophy of international law. Routledge.