Recording Business Transaction

RECORDING BUSINESS TRANSACTION

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
PART 1........................................................................................................................................3
b. Main users of accounting information:...................................................................................6
PART 2........................................................................................................................................9
PART 3......................................................................................................................................10
PART 4......................................................................................................................................12
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
In this report there has been a brief discussion about the various type of organisations that exists
and these are being discussed thoroughly. I have included all the possible information regarding
the type of organisation. Then there is an evaluation about the users of the accounting
information and what they do with this information. The report provides a comprehensive idea
about these issue. The report helps in understanding the knowledge about the double entry book
keeping, the general ledger, trial balance, income statement and the balance sheet. I have
interpreted these and this interpretation will help the user of financial statements to make there
decision about to invest, hold or sell there investment in the company.(Cochran, 2018) There
have been a draft shown in the report including all these. I have described the uses of journal,
ledger and the financial statements.

MAIN BODY
PART 1
A Briefly discuss the different types of business organisations that exist and highlight
three advantages for organisations utilising profit-based business structures.
There are different types of organisation through which a business can be operated. Each and
every individual cannot follow the same type of business organisation to operate there business,
there are many factors that affects how an individual can operate his business, these factors are
the economies scales, investment etc., There are mainly three types of business organisation
which are Sole proprietor, partnership and corporation. These are being explained below:
SOLE PROPRIETORSHIP
This type of business organisation is operated by a single person, that's why the word sole comes
into picture. In this type of business the owner makes all the decisions for the business and all the
responsibility regarding the decision is on the owner only. (Garrity, 2015) The owner do not
have to ask anyone else for making decisions like which place to operate his business, who
should be employed, what product to sell etc., since all the responsibility and risk is taken by the
owner all the profit generated or the losses incurred will be taken by the owner only. He/ she
does not have to share the profit generated to anyone else as they are not legally bound to do so.
These all were the benefits of operating business through sole proprietorship. The major problem
with sole proprietorship is that if the business incurs any losses then he or she is going to bear it
all by themselves, as they have unlimited liabilities toward there business and they may even
have to sell there personal asset to pay there business debt. Also, if the business is sued it means
that the owner himself is being sued as there is no separation between the business or the owner
so the owner will have to face legal actions if there business is being sued. And if the owner of
the business dies then the business is seized to exist as the owner handle each and every
operation of the company. There may also be a problem in raising finance as banks and financial
institutions are the only way they cannot go to the public to raise finance.
PARTNERSHIP
A partnership business is owned by 2 or more individual. In this type of business the whole
business is being operated by all the partners. (Bansal and Sunkara AppDynamics , 2015.) This
type of business helps in firstly raising finance as there are more than one individual working the
finance is available more easily as compared to the sole proprietorship as each partner brings