Formulation of Transactions in Ledger of S. Keyes

Project

Table of Contents
Table of Contents.............................................................................................................................2
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
a. Identification of the decision makers and explanation of need for accounting information....1
b. Explanation of advantages and disadvantages for profit business structure............................2
PART 2............................................................................................................................................3
Journal entries to record the transactions.....................................................................................3
PART 3............................................................................................................................................4
a. Recording transactions in ledger of S. Keyes..........................................................................4
b. Formulation of trial balance.....................................................................................................5
PART 4............................................................................................................................................6
a. Formulation of income statement for S. Keyes.......................................................................6
b. Explanation of possible impacts of COVID 19 on the income statement of company...........6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business transactions are the inflow and outflow of cash which is done by the businesses
for the purpose of carrying out operational activities. It is very important for the organisations to
make sure that they are able to formulate effective decisions for business and keep detailed
information of all the transactions that are performed during the accounting year (Abdulajid,
2020). This assignment is focused with recording business transactions of the companies in
books. There are four different parts in this assignment. First part is focused with large company
which is listed on stock exchange. The enterprise which is selected for this part is Unilever
which is operating its business all around the world and mainly established in United Kingdom.
Rest of the three parts are focused with recording of business transactions and formulation of
different accounts.
PART 1
a. Identification of the decision makers and explanation of need for accounting information
Decision makers are the individuals who are responsible for formulating effective
decisions for business so that the entities can carry out all the operations in systematic manner. If
the businesses will not be able to meet their expectations, then it may leave negative impact upon
their engagement level. Unilever is one of the largest entities of United Kingdom which is
operating its business all around the world. There are various decisions makers of the company
and discussion of all of them in context of the enterprise is as follows:
Shareholders: These are the individuals who are having shares within the organisation.
In Unilever all the shareholders need accounting information as it can help them to determine
that the funding which is provided by them to the organisation is utilised by the organisation
properly or not. With the help of accounting information, they can analyse financial stability of
business and formulate effective decisions for future (AL-Saji, 2019).
Creditors: All the external parties which are providing goods to the enterprise on credit
are known as creditors. For all the businesses it is very important to keep them retained with
business as it can help to carry out all the operations in systematic manner. The detailed
accounting information is required by the creditors who are providing goods to the enterprise on
credit. It can benefit them by evaluating credit worthiness of the business and make decision of
offering credit in future.
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Managers: These the individuals who are responsible for formulation of effective
strategies for proper execution of operational activities of business. Accounting information is
needed by them as it can help to determine actual position of business and then formulate
effective decisions according to the same. In Unilever when the managers will get accounting
information then they can determine the causes of bad performance and then find ways to
improve it.
Investors: These external stakeholders analyse efficiency and actual position of business
and then invest funds in business so that higher returns could be generated by them. They need
accounting information to evaluate that the business in which they will be investing their money
will provide them good returns or not. In Unilever investors try to determine the ability of
company to offer them high interest on their funding by evaluating the accounting information
available to them therefore it is needed by them (Bartolini and DeSilvey, 2020).
b. Explanation of advantages and disadvantages for profit business structure
Accounting is the process of recording all the transactions of business in the books so that
the business’s actual position could be determined. It is very important for all the businesses to
make sure that all the accounting related principles, rules and regulations are followed as it can
help to formulate appropriate and accurate books and accounts. There are various advantages and
disadvantages of it for businesses. Discussion of all of them for the enterprises is as follows:
Advantages of accounting: All the major advantages of accounting for a profit business
structure like Unilever are as follows:
 Maintains the records of business: With the help of accounting business entities can
mainta9in the business records and keep detailed information of all the transactions
performed by the company during the year. It will help the managers to get detailed
information of each and every activity which is related to inflow and outflow of cash.
 Facilitate decision making: Accounting can help the decision makers to formulate
effective decisions because it can guide them through out the way of analysis of actual
position of business. By evaluating the accounts stakeholders like managers, creditors,
investors etc. will be able to make future decision for their as well as organisation’s
betterment (Kelly and Banaszewski, 2018).
Disadvantages of accounting: Several disadvantages of accounting are covered in the
following discussed points:
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