Recording Business Transactions: Steps, Accounting Users, Journal Entries, Income Statement, and Performance Prediction

This report covers the steps to start a business, accounting users and their use of accounting information, journal entries, income statement preparation, and performance prediction for a business. It also includes examples and explanations to help readers understand the concepts better.

Recording Business
transaction

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK A...........................................................................................................................................3
1. Write down the steps required to follow by David Green to start a business.........................3
2. Discuss who are the accounting users and how they use the accounting information............4
TASK B...........................................................................................................................................4
1. Pass the journal entries with narrations ..................................................................................4
2. Solve the following ................................................................................................................5
a) Record the transactions in General ledger of Maurice and brothers..................................5
b) Trial Balance......................................................................................................................7
TASK C ..........................................................................................................................................8
1. Prepare an Income statement for B Moore.............................................................................8
2.Predict the performance of the business in the year 2022, after taking into consideration the
after-effects of Covid-19 Pandemic............................................................................................8
CONCLUSION ...............................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business transactions alludes to the events that take place in the business. The transactions of the
business is recorded with the view of getting an insight about how the business is performing and
if they are earning a profit or not. These deals are properly recorded in the books of records to
find out assuming that the business procures a benefit or misfortune from participating in these
deals (Austen, Gilchrist and Hailstone, 2018). This report is partitioned into three sections, the
initial segment directs a new business visionary in what ways he can begin a business and how
bookkeeping helps various partners of Reckitt Plc, a family merchandise and home style
business. The subsequent part features how various exchanges are recorded and passed in the
books of records. Also the third part shows how budget summaries are ready for a business.
TASK A
1. Write down the steps required to follow by David Green to start a business
Following are the steps which are required by David Green to take up if he is planning to start a
business of Decorator:
 The starting advance which is needed by the business to follow is arranging a plan of
action which is needed to assist the money manager with understanding the opportunities
that are available in the business.
 the owner in this progression must be obvious of the dreams and missions of the
undertaking that they need to take up for the business association.
 Subsequent forming the plan of action, the pioneers need to make a business association
posting about the product and work the business will bargain in (Houdet and et.al.,
2020).
 In the wake of deciding the creation line, the business association currently need to
decide the drawn out plot for improvement that they will go before to catch the
contending edge in the business.
 The endeavour is additionally expected to have a net presence on the web-based media
which will help the venture in its settlement on the lookout and enhance potential clients.

2. Discuss who are the accounting users and how they use the accounting information.
Owners: they utilize this information to dissect the productivity of their speculations. It
empowers them to deliver profits for their ventures. It likewise assists them with learning future
course of action (Petkov, 2020).
Creditors: these are interested to learn credit value of the undertaking. These incorporates
providers, banks, moneylenders of money. It assists them with investigating monetary place of
the business and on the off chance that they can stretch out any credits to them..
Regulatory Authorities: they need to discover that the bookkeeping data is as per the principles
and their consistence with the law of state where the business is occurring
Investors: they need the bookkeeping data as they need to determine the danger in contributing
and the profits and plan appropriately how much sum and where they ought to contribute for
better returns (Zhou and Lamberton, 2021).
TASK B
1. Pass the journal entries with narrations
Date Particulars Debit Credit
01/09/21 Assets A/c
Fixtures
Stock
Debtors ( 105 + 311 )
Bank
Cash
Creditors ( 229 + 80 )
Capital
(Business being started)
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 150

Office Fixtures
(Office fixtures bought through credit was written-
off)
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. Solve the following
a) Record the transactions in General ledger of Maurice and brothers
Cash Account
Date Particulars Ref Amount Date Particulars Ref Amount

03/08/21 Bank 2800 15/08/21 Office Fixtures 110
19/08/21 Toyota Co. 8700
31/08/21 Balance c/d 6440 25/08/21 Bank 430
9240 9240
Bank Account
Date Particulars Ref Amount Date Particulars Ref Amount
03/08/21 Cash 2800
01/08/21 Capital 36800 04/08/21 Van 6200
25/08/21 Cash 430 05/08/21 Office Fixtures 1000
02/08/21 Loan Payable 12400 28/08/21 Office Fixtures 750
31/08/21 Balance c/d 38880
49630 49630
Van Account
Date Particulars Ref Amount Date Particulars Ref 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
Office Fixtures
Date Particulars Ref Amount Date Particulars Ref Amount
01/08/21 Capital 1200
05/08/21 Bank 1000

05/08/21 Sharp Office Ltd 2400 31/08/21 Balance c/d 5460
15/08/21 Cash 110
28/08/21 Bank 750
5460 5460
Sharp Office (Creditor)
Date Particulars Ref Amount Date Particulars Ref Amount
31/08/21 Balance c/d 2400 05/08/21 Office Fixtures 2400
2400 2400
Toyota Co. Accountable
Date Particulars Ref Amount Date Particulars Ref Amount
19/08/21 Cash 8700 08/08/21 Van 8700
8700 8700
Loan Payable Account
Date Particulars Ref Amount Date Particulars Ref Amount
31/08/21 Balance c/d 12400 02/08/21 Bank 12400
12400 12400
Capital Account
Date Particulars Ref Amount Date Particulars Ref Amount
31/08/21 Office Fixtures 1200
31/08/21 Van 32000 31/08/21 Balance c/d 70000
31/08/21 Bank 36800
70000 70000

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
TASK C
1. Prepare an Income statement for B Moore
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
TOTALS ( A – B – C ) -48980
2.Predict the performance of the business in the year 2022, after taking into consideration the
after-effects of Covid-19 Pandemic
For the situation, the income statement of the business are visible appearance a misfortune for
the year 2020. this misfortune is because of the interruptions that have been made in the working
of the organizations due the Covid-19 Pandemic (Yuan and Macve, 2019). Before that the
business is visible having an expanding benefits over the most recent 7 years. This deciphers that
the business was working effectively and have a believed customer base in the market as they
have expanded deals in these years. Taking in thought these arrangement of data it tends to be
anticipated that the business will create a gains in the year 2022, the benefits won't be just about
as enormous as the organization have found in the past however the business will acquire
benefits. To get this going the business needs to go to remedial measures and earn just enough to
pay for the costs and have a break even point in the business in the year 2021.
CONCLUSION
From the above mentioned report it can concluded that, recording of business transaction is an
important aspect as it gives clarity to the business about the dealings that are happening in the

business which relates to where the incomes of the business are coming from and where the
business is spending its revenues.

REFERENCES
Books and Journals
Austen, D., Gilchrist, C. and Hailstone, P., 2018. Essential Accounting for Cambridge IGCSE®
& O Level. Oxford University Press-Children.
Houdet, J. and et.al., 2020. Adapting double-entry bookkeeping to renewable natural capital: An
application to corporate net biodiversity impact accounting and disclosure. Ecosystem
Services. 45. p.101104.
Petkov, R., 2020. Artificial intelligence (AI) and the accounting function—A revisit and a new
perspective for developing framework. Journal of Emerging Technologies in
Accounting. 17(1). pp.99-105.
Yuan, W. and Macve, R.H., 2019, July. Some Theoretical Implications of New Discoveries in
Chinese Accounting History Research from Original Archival Materials. In AAA Annual
Meeting, August.
Zhou, Y. and Lamberton, G., 2021. Teaching double-entry accounting: A simplified scaffolded
technique based on cognitive load theory. Journal of education for business. 96(7).
pp.445-453.