Recording Business Transactions - Desklib

This report by Desklib covers the steps involved in starting a business, involvement of decision-makers in accounting, journal entries, ledger accounts, and income statement creation. It also includes an income statement for B Morre and discusses the impact of the Covid-19 pandemic on profit for the year 2022.

Business Transactions

Contents
INTRODUCTION...........................................................................................................................3
ASSESSMENT 1.............................................................................................................................3
PART A...........................................................................................................................................3
Give the steps of starting the business of a decorator..................................................................3
Take a company that is listed on the London Stock Exchange and define the involvement of
decision – makers in accounting..................................................................................................4
PART B...........................................................................................................................................5
1. Record the journal entries in the F Polk books........................................................................5
2. Ledger accounts and Trial Balance in the books of Maurice & Brothers..............................6
PART C...........................................................................................................................................7
a) Create a income statement for B Morre...................................................................................7
b) Explain what the profit can be increased or decreased for the year 2022, considering the
Covid – 19 pandemic...................................................................................................................8
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9
APPENDIX....................................................................................................................................10

INTRODUCTION
A business transaction is an organization's financial condition that represents the
company's fiscal health. These are sorted into two groups, journals and ledgers. Journal records
all of the company's financial records in a book. Ledgers gives the opening and closing balances
of the various accounts mentioned in journals of the organisation (Grishin, Obbad and Church,
2019). In this report, a person want to start his own venture but does not know about the steps of
starting the business, so the steps are explained. The decision makers also need financial support,
explains Sainsburry. Then the journal entries, ledger, trial balance and income statement are
created taking into account the specified transaction details.
ASSESSMENT 1
PART A
Give the steps of starting the business of a decorator.
David Green wants to start a sole proprietorship and wants to start a new kind of
decoration business. It is the responsibility of the owner to be aware about the debts that may
arise to the company. Although it does not know the roles and responsibilities in starting the
company. It would like advice on a few steps involved in opening a business.
1. Make a model: To be successful in business, he must first create a model that will be
helpful in organizing business activities. Which activities and services are to be offered
must be determined.
2. Build a strategy for the business: A plan is made to make progress which can be
accomplished only when the vision and mission is clear. For this, one should set the
competitive advantage and settled on the decisions dependent on the facts and plan an
efficient development for the company (Hess. and Andiola, 2018).
3. Working of a business portfolio: It is like a booklet, which specifies the objectives,
abilities and the drives which are taken or to be taken by the organization. It will likewise
have the insights regarding the tasks which are to be completed effectively in future. It
additionally features the data about the senior executives, their abilities and profession.
4. Preparing the list of the equipment needed: The management must determine the
instruments which can be required for the operation of the business and make a list of

those items. For example in the decoration shop, for lighting, curtains, flowers, balloons
etc.
5. Create a technical roadmap: The long-term and short-term goals need to be set. It will
help to understand the opportunities and hurdles that may arise on the way to its
fulfilment (Nurlinda and Bertuah, 2019). It also helps in setting a specific amount of time
that will lead to the tasks being completed on time.
6. Social Medial Presence: Nowadays, people prefer to search for business proposals
online. Hence, it is essential for David to create accounts on various social media
platforms like Instagram, Facebook, you tube, LinkedIn, etc. It will help in getting the
proposal with the increase in its visibility. The owner can also post some pictures or
videos related to the venture, to help customers learn more about the company's work
process.
7. Create a network: Every company must get involved in activities that affect the well-
being of society in order to promote the sustainable environment. It increases goodwill
and helps build a community that nurtures the organizations. Making more contacts is a
free advertising technique and will also increase the number of customers.
Take a company that is listed on the London Stock Exchange and define the involvement of
decision – makers in accounting.
Bookkeeping is a process of recording, evaluating and closing bookings, which provides
the bookkeeping data and helps in decision-making. The aim of accounting is to give the
financial information about the company. It helps to know the financial health and performance
that can be used in user decision making (Pandey and Litoriya, 2021). The Sainsburry is listed on
the London Stock Exchange and various number of decision-makers are responsible for the
company's position in the market. Acquisition, incentives, and procurement of long-term
resources for services and products could be considered. Accurate data is important to ensure
that the organization's business is beneficial. Every decision made within the company depends,
directly or indirectly, on the users of Sainsburry.
Decision-makers of Accounting:
1. Owners: These can check the rate of return on investment, achieved using accounting
data and compare the company's results with those of corresponding firms.

2. Investors: Before the contribution, the entrepreneur should record and investigate the
monetary situation using the accounting data of an organization.
3. Management: These are people who plan and prepare the future. The plan is drawn up
according to the company's goals. The customers of the accounting information use it to
plan, control and simply make decisions (Schneider, 2018). It helps them evaluate the
company's presentation and position.
4. Government: The authority needs accounting information of the company in order to
collect various types of taxes, such as direct and indirect.
5. Creditors: It can use accounting information to assess an accountant's reliability and
ability to reimburse obligations.
PART B
1. Record the journal entries in the F Polk books.
JOURNAL ENTRIES – F POLK
Date Particulars 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 Syme Ltd
Office Fixtures
(Office fixtures bought through credit was written-off)
150
150

10/09/21 Bank
Bad Debts
M Abel
(M Abel declared bankruptcy and received the amount
in full settlement)
180
131
311
18/09/21 Machinery
Cash
Bank
Brown Ltd
(Purchased a machinery and the amount paid by
cheque, cash and on credit)
1800
100
500
1200
26/09/21 Brown Ltd
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. Ledger accounts and Trial Balance in the books of Maurice & Brothers.
a) Make General Ledgers - This is made is excel.
b) Trial Balance
TRIAL BALANCE
Maurice & Brothers
Debit Credit
Bank 38880
Cash 6440
Van 46900

Office Fixtures 5460
Sharp Office Ltd (Creditor) 2400
Loan Payable 12400
Capital 70000
TOTAL 91240 91240
PART C
a) Create a income statement for B Morre.
Particulars Amount (£)
Sales 95000
Less: Sales Returns 3500
Less: Carriage Inwards 890
Net Sales (A) 90610
Opening Stock 18000
Purchases 110000
Less: Return Outwards 720
Less: Closing Stock 13000
Net Purchases (B) 114280
Motor Expenses 1400
Rent 7000
Telephone Charges 830
Wages and Salaries 14000
Insurance 1030
Office Expenses 800

Sundry Expenses 250
Operating Expenses (C) 25310
NET PROFIT (A -B - C) -48980
b) Explain what the profit can be increased or decreased for the year 2022, considering the Covid
– 19 pandemic.
For some organizations, 2020 was perhaps the most difficult circumstances in late time.
While most undertakings gained a standard progress in mid 2020, the Covid-19 pandemic
suspended the advancement in most area of the universe in mid-March. From breaks in day – to
– day exercises to the total closure of the organizations.
As per the income statement, the organization had experienced a misfortune. This
demonstrates that the costs have surpassed the income. In any case, deals from the association
brings in some cash yet can't cover its costs (Stice, 2018). This could be because of the Covid
pandemic, which has brought about lowering the demand of the items and the services and
consequently diminishing the sale. The possible outcomes are various, going from small direct
impacts like, a closure of business to indirect impacts like changes in business techniques.
Understanding the effect of the company and the monetary implications is critical for the
management.
CONCLUSION
From the above report it can be concluded that establishing a business strategy is vital in
starting a business. The entry of the journal entry, general ledger, and income statement shoes the
financial condition of the company. The net profit is shown in the income statement. This report
meets Sainsburry and explains the organization's decision-makers.

REFERENCES
Books and Journals
Grishin, D., Obbad, K. and Church, G.M., 2019. Data privacy in the age of personal
genomics. Nature biotechnology. 37(10). pp.1115-1117.
Hess, M.F. and Andiola, L.M., 2018. Fraud risk brainstorming at tesla motors. Issues in
Accounting Educatior. 33(2). pp.19-34.
Nurlinda, R.A. and Bertuah, E., 2019. Financial performance information as forming corporate
failure model in Indonesia. Academy of Accounting and Financial Studies Journal. 23.
pp.1-9.
Pandey, P. and Litoriya, R., 2021. Securing e-health networks from counterfeit medicine
penetration using blockchain. Wireless Personal Communications. 117(1). pp.7-25.
Schneider, A., 2018. Studies on the impact of accounting information and assurance on
commercial lending judgments. Journal of Accounting Literature. 41. pp.63-74.
Stice, D., 2018. The market response to implied debt covenant violations. Journal of Business
Finance & Accounting. 45(9-10). pp.1195-1223.
Wang, Z. and et. al., 2020. Blockchain-based framework for improving supply chain traceability
and information sharing in precast construction. Automation in Construction. 111.
p.103063.

APPENDIX
Link to excel file