Recording Business Transactions

This document discusses the meaning of accounting and the importance of accounting information in decision making. It also explores the advantages and drawbacks of using accounting information. The document further includes journal entries for different transactions and discusses the impact of the current pandemic on income statements.

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...............................................................................................................................................4
Journal entries.............................................................................................................................4
Task 3...............................................................................................................................................5
Journal entries.............................................................................................................................5
Task 4...............................................................................................................................................8
a...................................................................................................................................................8
b...................................................................................................................................................9
REFERENCES..............................................................................................................................11

PORTFOLIO 1
MAIN BODY
Task 1
a
With reference to the meaning of accounting it is clear that the use of accounting information it
is very important for the decision maker to make the effective use of the accounting information.
Whether the company be it big or small the most important thing for the company is to have
effective decision maker. The major reason is that the success of the company is dependent over
the fact that how well the company is able to take effective decision. With reference to the
company Unilever the major decision maker of the company are shareholders, investors,
government and other important stakeholders (Faccia, 2020). If the company is not having
proper decision maker then this will affect the working of the company to a great extent. Thus,
for taking the right and appropriate decision the most important thing is the effective use of the
skills of the decision maker to make the company grow and develop. Thus, for this the most
important thing used by decision maker of Unilever is that they must effectively use all the
information being provided within the accounting information. This is particularly because of the
reason that this assists the company in effectively take decision for the betterment of the
company.
b
By referring to Unilever it can be stated that major advantage faced by accountant is that the use
of accounting information provides a clear view to the company and the accountant in order to
take appropriate decision and plan for the future. With addition to this another major benefit is
that accountant can use this information as base for their future development of budgets.
On the flip side the major drawback for accountant of Tesco is that it is not necessary that every
person is in situation of understanding the requirements of accounting and understand what is
being told by the accountant in accounting information (Gonocruz, 2017).

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
1050
1050

(Being half amount paid to TS co by issuing
cheque)
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
By referring to the above profit and loss account it is clear that the company is being suffering a
loss of 29070 which is not good for the company. Thus, this might be because of the reason that
when the company has increased the indirect expenses of the company and this has resulted in a
loss for the company.
b
The current pandemic has created a lot of impact over the company and the income statement of
the company. The major reason for this is that there were many changes taking place in the
economy of the country because of the pandemic COVID 19. These changes are as follows-
Political- with respect to the current COVID 19 the government has increased trade duties and
restriction over the inter- country trade and this has limited the working of the company. Thus,
this had a great negative impact over the income statement of company.
Economic- with respect to the current pandemic there is slowdown in the business and the
economy and this has resulted in a decline in the business capacity. Thus, this decreased the
profit of the company and this had a negative impact over the income statement of the company.
Social- this is also a major factor which has a great impact over the working of the company and
the income statement of the company. With respect to the current pandemic the consumer have
changes their buying preference and this had a lot of impact over the working and sales of
company. Due to the current pandemic the sales of company has reduced which resulted in the
decrease in the profit of company (Dai and Vasarhelyi, 2017).
Technological- this factor involves the changes taking place in the technology and the related
factors. With respect to the current pandemic there is also a great impact over the working of the
companies. Thus, with respect to the current pandemic the usage of technology has reduced the
capacity of company to produce and this decreased the profits of the company.

Environmental- this is another major factor which impact the working of the company and the
income statement of the company to a great extent. The major reason for this is that due to the
current pandemic the consumer has become more hygienic and conscious relating to their health
and safety. Thus, for this company has to increase the investment in the practices which will
increase the environmental protection and this will increase cost of the company.
Legal- due to the present pandemic the government has increased much laws and rules and
regulation relating to protection to the employees and the working environment of the company.
Thus, for this as well the company has increased the compliance with laws and other rules and
regulation applicable to the company (Adamyk, 2017). Thus, for this the company also has to
hire some people who will continuously work in analysing the new changes taking place in legal
sector and trying to apply it to them and make sure that the company adheres to these laws in the
same intended manner.

REFERENCES
Books and Journals
Adamyk, O., 2017. Audit of Accounting Staff in Computer-Based Environment.
Dai, J. and Vasarhelyi, M.A., 2017. Toward blockchain-based accounting and assurance. Journal
of Information Systems, 31(3), pp.5-21.
Faccia, A., 2020. X-Accounting®-Towards a new Accounting System. Blockchain applied
accounting. How robots will overcome humans in accounting Recording.
Gonocruz, K.G.P., 2017. Addressing the difficulty of using the manual accounting system in
sales transactions of a real estate project.