Recording Business Transactions: Steps for Starting a Sole Trading Business, Decision Makers Using Accounting Information, Journal Entries, Ledgers, and Income Statement

This report covers the steps for starting a sole trading business, decision makers using accounting information, journal entries, ledgers, and income statement. It includes a detailed guide on starting a sole trading business, the importance of accounting information for decision makers, examples of journal entries and ledgers, and an income statement for BMoore with a prediction of next year's profit/loss.

Recording Business
transaction

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK A...........................................................................................................................................3
I. Steps for starting new sole trading business as decorator by David Green........................3
II. Decision makers related to a business which uses accounting information to aid their
decisions.................................................................................................................................4
TASK B...........................................................................................................................................5
1. Recording journal entries in the books of accounts of Fpolk............................................5
2. Maintaining ledgers accounts and trial balance of Maurice and brothers ........................6
PART 4............................................................................................................................................9
(a) Preparing income statement and prediction of next year profit of BMoore.....................9
Income statement for the year ended 30 September 2021......................................................9
b) Why the profit has decreased and increased over the years and what will be the estimate of
profit/loss in 2022.................................................................................................................10
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
In each business there are series of financial exchange which happens. Exchanges of business
incorporates that multitude of occasions which happens between at least two gatherings by the
product of items and services (Orthodoxou, and et.al., 2021). This report is divided into three
areas. The initial segment will cover the means for beginning a sole exchanging business of
David Green. It additionally depicts about the Aviva Plc. which is listed on the London stock
trade alongside the users of the accounting data. In Part B , the journal entries of Fpolk in the
books of records and keeping up with record records and preliminary equilibrium of ABC
undertakings. In Part C, the assessment of the Income articulation of B Moore and effect of
covid19 on the business is examined toward the end.
TASK A
I. Steps for starting new sole trading business as decorator by David Green.
A sole ownership is a type of business which can be effectively overseen on the grounds that
there is just a solitary chief and less possibilities of miscommunication. David Green needs to set
up another sole merchant business as decorator in this way, steps of starting another firm can be
clarified as given beneath
1. Put together exploration in the market: Conducting review in the commercial center assists
with gathering data about the current contentions in the field of embellishment and being familiar
with client portion who are keen on results of decoration (Davidson, 2018).
2. Drafting strategy: Before beginning real work, outline of business thoughts, plans,
methodologies of promoting, how it will run and what will be the bookkeeping systems to keep
up with fiscal reports is fundamental for smooth direct of big business.
3. Source of financing-In this progression, dealer will appraise the prerequisites of capital
required and sources from where assets can be brought needed up in working business of
improvement.
4. Deciding place of business: Location of firm likewise contributes in its prosperity it is
possible that it will situated on concentrated area or offering both on the web and disconnected
administrations (da Silva Rodrigues, 2021). The choices chose will influence the income of the
firm also.

5. Choosing name of business: To situate a firm in the personalities of individuals, choosing a
name which suitably portrays the nature and brand of business accurately will likewise upgrade
the benefit of a sole exchanging business. Guaranteeing that name picked ought not be utilized
by some other brand is hence fundamental.
6. Enrolling business: It is significant to secure a business with legitimate arrangement for
guaranteeing that design business is completed with following predefined set of cycles, for
example, rules and guidelines withstanding while at the same time working a business.
7. Applying for License and starting business account: After getting enlistment of firm, David
Green can apply for brightening sole merchant permit and when administrative work is finished
it can likewise demand for opening financial balance to set aside and pulling out cash and
numerous other business related exchanges (Helgeson, and Nierenberg, 2018).
II. Decision makers related to a business which uses accounting information to aid their
decisions.
Accounting is the method involved with recording,analysing,interpreting and summing
up the monetary exchanges of the business to watch out for the monetary exhibition of a venture.
It is essential to follow bookkeeping cycle to take choices with respect to estimating monetary
execution based on current execution (Bâtcă-Dumitru, 2020). To keep up with security in money
related terms and keep track on the incomes of the business general bookkeeping principles are
embraced while planning fiscal reports of an undertaking. Aviva Plc, British multinational
insurance company headquartered in London, England, bookkeeping data is critical for its
stakeholders. Given underneath are the leaders of the accounting information -
Investors: This incorporates people or venture having shares in load of a specific organization.
Aviva Plc, investors utilizes its bookkeeping data to acquire the bits of knowledge about
monetary wellbeing.
Government-Accounting data is important to guarantee government pretty much every one of the
recommended rules and guidelines are followed by an endeavour or not.
Creditors: Lender utilizes data of records to check about the limit of borrower, monetary position
and its taking care of capacity. Lenders of Aviva Plc, utilizes its records to be aware of capacity
to reimburse the obligations taken.
Lenders: For raising capital of a firm it requires finance for something similar, financial backers
are people who supply required assets in business (White, 2020). Bookkeeping data of Aviva

Plc, facilitate its financial backers to acquire data about its productivity so they can take savvy
choice whether or not to contribute.
Investors: Different books of accounts are reviewed and analysed before a investor invest in a
company. These investors go through the prospects as well as the financial position of the as
business as they have to invest a huge amount (Eshghi, and Kargari, 2019). Examples of the
investors are, angel investors, banks, peer-to-peer lenders, personal investors. In the case of
Aviva Plc. Different types of investor have invested their money in the company.
Owners: These are the shareholders of the company, they take part in the company decision
making activities and also in the meeting of the companies as in the case of Aviva plc.
TASK B
1. Recording journal entries in the books of accounts of Fpolk.
Journal entries in the books of Fpolk
Date Particular L.F. Debit Credit
01/09/21 Van
fixtures
Stock
Debtors
Bank
Cash
Creditors
Capital
(capital introduced in the business)
5700
2800
5200
416
1060
85
309
14952
01/09/21 Bad debt
P mullen
(Bad debts written off amount 105)
105
105
05/09/21 Syme ltd
office fixtures
(Fixtures returned to Syme ltd.)
150
150
10/09/21 Cash 180

Bad debts
M.Abel
(Half amount received in cash and
rest is declared as bad debt)
131
311
18/09/21 Machinery
Cash
Bank
Brown ltd.
(Machinery purchased from Brown
ltd. payment made in cash,bank and
remaining on credit)
1800
100
500
1200
26/09/21 Brown ltd.
Bank
(payment made to creditor by
cheque)
600
600
28/09/21 Insurance bill
Drawings
Bank
(Payment made by cheque of
personal insurance and other
insurance bill)
60
70
130
2. Maintaining ledgers accounts and trial balance of Maurice and brothers
(a) Ledger in the books of Maurice and brothers
Capital account
Date Particular Ref Amount Date Particular Ref Amount
31/08/21 Balance c/d 70000 01/08/21 Office fixtures 1200
van 32000

Bank 36800
Total 70000 Total 70000
01/09/21 Balance b/d 70000
Office fixtures Account
Date Particular Ref Amount Date Particular Ref Amount
01/08/21 Capital 1200 31/08/21 Balance c/d 5460
05/08/21 Bank 1000
05/08/21 Sharpe office ltd 2400
15/08/21 cash 110
28/08/21 Bank 750
Total 5460 Total 5460
01/09/21 Balance b/d 5460
Van account
Date Particular Ref Amount Date Particular Ref Amount
01/08/21 capital 32000 31/08/21 Balance c/d 46900
04/08/21 Bank 6200
08/08/21 Toyota 8700
Total 46900 Total 46900
01/09/21 Balance b/d 46900
Bank account
-Date Particular Ref Amount Date Particular Ref Amount
01/08/21 Capital 36800 03/08/21 Cash 2800

02/08/21 Bank loan 12400 04/08/21 van 6200
25/08/21 cash 430 05/08/21 Office fixture 1000
19/08/21 Toyota 8700
28/08/21 Office fixture 750
31/08/21 Balance c/d 30180
Total 49630 Total 49630
01/09/21 Balance b/d 30180
Bank loan
Date Particular Ref Amount Date Particular Ref Amount
31/08/21 Balance c/d 12400 02/08/21 Bank 12400
Total 12400 Total 12400
01/09/21 Balance b/d 12400
Cash account
Date Particular Ref Amount Date Particular Ref Amount
03/08/21 bank 2800 15/08/21 Office fixture 110
25/08/21 bank 430
31/08/21 Balance c/d 2260
Total 2800 Total 2800
01/09/21 Balance b/d 2260
Toyota account
Date Particular Ref Amount Date Particular Ref Amount
31/08/21 Balance c/d 17400 08/08/21 van 8700

19/08/21 bank 8700
Total 17400 Total 17400
01/09/21 Balance b/d 17400
Sharpe office limited
Date Particular Ref Amount Date Particular Ref Amount
31/08/21 Balance c/d 2400 05/08/21 Office fixture 2400
Total 2400 Total 2400
01/09/21 Balance b/d 2400
(b) Trial balance as at 31 August 2021
Particular Debit Credit
Capital 70000
Office fixture 5460
van 46900
bank 30180
Bank loan 12400
cash 2260
Toyota 17400
Sharpe office Ltd 2400
Total 84800 84800

PART 4
(a) Preparing income statement and prediction of next year profit of BMoore
Income statement for the year ended 30 September 2021
Particular Details Amount
Sales 95000
Less:Sales return 3500
Net sales 91500
Cost of goods sold
Opening stock 18000
Add: Purchases 110000
Add: carriage inward 890
Less:purchases return 720
Less:closing stock 13000
COGS 115170
Gross profit/Loss 23670
Less: operating expenses
Carriage outward 500
Motor expenses 1400
Rent 7000
Telephone charges 830
Insurance 1030
Office expenses 800
Sundry expenses 250
Wages and salary 14000

Operating expenses 25810
Net loss -49480
b) Why the profit has decreased and increased over the years and what will be the estimate of
profit/loss in 2022.
Many of the companies found it difficult to maintain their financial records smooth as
before. Because of the occurrence of the Covid in the first quarter of the year the businesses has
effected significantly and it effected each and every business (Davies, 2022). In the month of
march all the activities of the businesses got stop all of the sudden and the loss is to be bear by
the common people of living and earnings both. Thus the expenses exceeds the incomes of the
organisation and thus not able to meet its fixed expenses during the period. This all caused the
decrease in the demand of the product and so thus revenue of the organisation declined. This
directly or indirectly impacted on the businesses and which indirectly lead them to closure. The
business have earned a good amount of profit in the last 8 years and acquired a significant
market share. If the business continue its operations with new ideas so that, new market demand
and different marketing strategies that can contribute to the increase in the sales and also become
profitable. With the new market strategies the organisation can boost up their sales and also the
turn over so that the can achieve their organisational goals. The primary objective of a business
is to earn profit which has been ruined due to pandemic situation. As of the now the government
has taken back the different regulations implemented, which have caused increase in the demand
of the product. The upliftment of the regulations has shown a positive impact on the market and
the demand has also risen. Various majors are taken to boost the economy as well as the
vaccination have helped the economy to rise.
CONCLUSION
From the above mentioned report it can be concluded that business transactions are necessary to
be recorded in the business and the formation of income statement and the statement of financial
position is vital to determine how the business is performing in the market. The preparation of
journal, ledger, trial balance and the income statement is shown in the above report. The impact
of Covid-19 on the business and its profit has been worse but the trend analysis of the profit
helps the business formulate plans to get better in its working.

REFERENCES
Books and Journals
Davidson, R., 2018. Business events. Routledge.
Orthodoxou, D.L., and et.al., 2021, August. Sustainable business events: The perceptions of
service providers, attendees, and stakeholders in decision-making positions. In Journal
of Convention & Event Tourism (pp. 1-25). Routledge.
Helgeson, J. and Nierenberg, C., 2018, December. Business Disruption Associated with Extreme
Events and Pathways to Planning for more Robust Recovery. In AGU Fall Meeting
Abstracts (Vol. 2018, pp. PA43F-1398).
Bâtcă-Dumitru, C.G., 2020. Accounting for Events and Transactions Regarding
Equity. CECCAR Business Review. 1(7). pp.19-29.
White, T., 2020. Direct producer ‚Ä" consumer transactions: Community Supported Agriculture
and its offshoots. In The Handbook of Diverse Economies. Edward Elgar Publishing.
Eshghi, A. and Kargari, M., 2019. Introducing a new method for the fusion of fraud evidence in
banking transactions with regards to uncertainty. Expert Systems with Applications. 121.
pp.382-392.
Davies, P., 2022. Related Party Transactions on the London Stock Exchange: What Works and
What Does Not?. Business Law Review. 43(1).
da Silva Rodrigues, C.K., 2021. Analyzing Blockchain integrated architectures for effective
handling of IoT-ecosystem transactions. Computer Networks. 201. p.108610.