Recording Business Transaction

This report covers the steps to start a business, the role of financial accounting in decision making, and the recording of journal entries in the books of F Polk. It also includes the preparation of an income statement for B Moore and an analysis of the ratios. The report is based on the reference of Mark and Spencer.

Business Transactions

Contents
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
1.Give step on how to start a business.........................................................................................3
2.What is the role of financial accounting and who is responsible for decision making............3
Part B...............................................................................................................................................4
2. (a) Post the Journal entries into the General Ledger Accounts...............................................5
2. (b) Make the trail balance on 31st August, 2021......................................................................7
PART C...........................................................................................................................................8
(a) Make the income Statement of B Moore for the year ending on 30th September, 2021........8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
A business transaction is done between two or more parties which involves interchange
of goods and service for some consideration (Acquier, Carbone and Massé, 2019). These
transactions are recorded in the books of accounts that is journal and ledger. All the business
transactions are recorded in the books of account, then these transactions are posted to their
respective ledgers. Mark and Spencer is taken for the reference.
TASK
1.Give step on how to start a business.
David is an independent decorator who wants to start his own business. He wants to start
his sole proprietor business, but he recognise that he will be exclusively responsible for all the
company's debts.
1. Registration of firm: Firstly the owner has to register the firm to get license to run the
business.
2. Business idea: Before entering to the business, one must have the blue print to run the
business.
3. Execute business plan: The blue print created needs to be implemented to the business.
4. Technological Strategy: A technical roadmap is created so that the firm knows the
requirements of its technological needs.
5. Community Network: It is the most important part of the business cycle as community
network helps in maintaining the business relations (Faruq, 2021).
These steps need to be followed to start a new business.
2.What is the role of financial accounting and who is responsible for decision making.
Accounting involves recognising, recording, interpreting, analysing, distributing and
communicating accounting information to the different users (Song, Yu, and Lu, 2018).
Accounting system provides information regarding the financial position of a company.
Bookkeeping information:
 Owners: They may use the information to know the the profitability and financial
position of the business. And compare those statements with the marks and Spencer.

 Management: There is difference between the management and stakeholders, they take
decision according to the organisational objectives and investment decision (Okazaki,
2018).
 Investors: These are the one who research and analyse the final accounts of a company
to know its financial position. Mark and Spencer, Investors refers to the annual reports of
the organisation.
Part B
1. Post the Journal entries in the books of F Polk.
Journal of F Polk for the month September
Date Details Fol Debit Credit
01/09/21 Assets A/c
Fixtures
Stock
Debtors (105 + 311)
Bank
Cash
Creditors (229 + 80)
Capital
5700
2800
5200
416
1060
85
309
14952
01/09/21 Bad Debts
P Mullen
(Bad Debts written-off)
105
105
05/09/21 Payables
Office Fixtures
(Office fixtures bought through credit was written-off)
150
150
10/09/21 Cash
Bad Debts
M Abel
(M Abel declared bankruptcy and received the amount in
full settlement)
180
131
311

18/09/21 Machinery
Cash
Bank
Payables
(Purchased a machinery and the amount paid by cheque,
cash and on credit)
1800
100
500
1200
26/09/21 Payables
Bank
(Half of the amount due paid through cheque)
600
600
28/09/21 Insurance Expenses
Drawings
Bank
(Insurance expenses paid by bank but later realised that
£70 is of personal house)
60
70
130
2. (a) Post the Journal entries into the General Ledger Accounts.
Cash Account
Date Particulars Fol Amount Date Particulars Fol Amount
03/08/21 Bank 2800 15/08/21 Office Fixtures 110
25/08/21 Bank 430
31/08/21 Balance c/d 2260
2800 2800
1/09/21 Balance b/d 2260
Bank Account
Date Particulars Fol Amount Date Particulars Fol Amount
01/08/21 Capital 36800 03/08/21 Cash 2800

25/08/21 Cash 430 04/08/21 Van 6200
02/08/21 Loan Payable 12400 05/08/21 Office Fixtures 1000
19/08/21 Van (Mercedes Plc) 8700
28/08/21 Office Fixtures 750
31/08/21 Balance c/d 30180
49630 49630
1/9/21 Balance b/d 30180
Van Account
Date Particulars Fol Amount Date Particulars Fol Amount
01/08/21 Capital 32000
04/08/21 Bank 6200 31/08/21 Balance c/d 46900
08/08/21 Toyota Co. 8700
46900 46900
1/9/21 Balance b/d 46900
Office Fixtures
Date Particulars Fol Amount Date Particulars Fol Amount
01/08/21 Capital 1200
05/08/21 Cash 1000
05/08/21 Payables 2400 31/08/21 Balance c/d 5460
15/08/21 Cash 110
28/08/21 Bank 750
5460 5460
1/9/21 Balance b/d 5460

Payables Account
Date Particulars Fol Amount Date Particulars Fol Amount
19/08/21 Bank 8700 5/08/21 Office Fixtures 2400
31/08/21 Balance c/d 2400 08/08/21 Van 8700
8700 8700
1/9/21 Balance b/d 2400
Loan Payable Account
Date Particulars Fol Amount Date Particulars Fol Amount
31/08/21 Balance c/d 12400 02/08/21 Bank 12400
12400 12400
1/9/21 Balance b/d 12400
Capital Account
Date Particulars Fol Amount Date Particulars Fol Amount
31/08/21 Bank 70000
31/08/21 Balance c/d 70000
70000 70000
1/09/21 Balance b/d 70000
2. (b) Make the trail balance on 31st August, 2021.
TRIAL BALANCE of Maurice & Brothers as at August, 2021
Details Debit Credit
Bank 30180
Cash 2260

Van 46900
Office Fixtures 5460
Payables 2400
Loan Payable 12400
Capital 70000
TOTAL 84800 84800
PART C
(a) Make the income Statement of B Moore for the year ending on 30th September, 2021
Income Statement of B Moore for the year ending on September 2021
Details Amount (£)
Sales 95000
Less: Sales Returns (3500)
Net Sales 91500
Opening Stock 18000
Purchases 110000
Less: Return Outwards (720)
Add: Carriage Inwards 890
Less: Closing Stock 13000
Cost of Goods Sold 115170
Gross Loss -23670
Less: Motor Expenses 1400
Carriage Outward 500
Rent 7000
Telephone Charges 830

Wages and Salaries 14000
Insurance 1030
Office Expenses 800
Sundry Expenses 250
Operating Expenses 25810
Net Loss -49480
(b) Analyse the income statement and the ratios. State the reason behind the change in the profit
of the organisation.
For some organisation which came under emergency services have benefited a lot from
the pandemic. But for such works it has been nightmare as many of the business were not able to
recover from the same(Shao, 2019). It was a roundabout for the businesses as no one expected
such a situation may come. The business have a huge potential of growth as compared to the
actual results.
CONCLUSION
From the above report it can be concluded that before starting a business one should have
business plan and also the whole process from where it start to where it ends. Further the final
accounts of F Polk is prepared and a company called B Moore is taken to compare both the firms
and their profitability on the basis of competitor's ratio.

REFERENCES
Books and Journals
Acquier, A., Carbone, V. and Massé, D., 2019. How to create value (s) in the sharing economy:
Business models, scalability, and sustainability. Technology Innovation Management
Review. 9(2).
Faruq, M., 2021. Islamic banking sharia compliance on currency transactions. Jurnal Suara
Hukum. 3(2). pp.407-426.
Okazaki, Y., 2018. Unveiling the potential of blockchain for customs. WCO Research Paper, 45.
Shao, Z., 2019. Interaction effect of strategic leadership behaviors and organizational culture on
IS-Business strategic alignment and Enterprise Systems assimilation. International
Journal of Information Management. 44. pp.96-108.
Song, H., Yu, K. and Lu, Q., 2018. Financial service providers and banks’ role in helping SMEs
to access finance. International Journal of Physical Distribution & Logistics
Management.