Financial Accounting: Company Startup, Financial Statements & COVID-19

This report provides a comprehensive overview of financial accounting principles in the context of a business startup. It details the steps involved in starting a decorator company, explains the role of top management in accounting for a company listed on the London Securities Exchange, and includes practical exercises such as recording journal entries and creating ledger accounts. Furthermore, it presents an income statement for a hypothetical business, B Morre, and discusses how the COVID-19 outbreak could impact income for the year 2022. The report concludes by emphasizing the importance of a well-defined company strategy and accurate financial reporting.

Recording business

Contents
Contents...........................................................................................................................................2
ASSESSMENT 1.............................................................................................................................1
INTRODUCTION...........................................................................................................................1
PART A...........................................................................................................................................1
Explain the steps involved in starting a fresh decorator company..............................................1
Explain the top management in charge of accounting for a company listed on the London
Securities Exchange.....................................................................................................................1
PART B...........................................................................................................................................2
1. Record the journal entries in the F Polk books........................................................................2
2. Make the ledger accounts in the books of Maurice and brothers............................................3
PART C...........................................................................................................................................6
Create a income statement for B Morre.......................................................................................6
b) Explain how, in consideration of the COVID–19 outbreak, income for the year 2022 could
be increased or decreased............................................................................................................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

ASSESSMENT 1
INTRODUCTION
A capital investment is a company's monetary status that demonstrates the firm's proper
functioning (Hamera, 2017). This article walks anybody interested in starting a designer
company through the steps necessary to get started. Furthermore, as Marks & Spencer says,
upper-level managers must conduct accumulation investigations.
PART A
Explain the steps involved in starting a fresh decorator company
David Green is a solo person who wishes to open his own decoration company. He is
totally conscious of his responsibility for any and all of the firm's responsibilities. Apart from the
fact that he is completely unaware of the actions and obligations associated with the time of its
inception. As a result, he requested clarity on a number of issues which the firm faces during the
time of incorporation.
 Developing a company plan: A business structure is established to maximise
stock value that can only be accomplished if the goals are stated clearly. To do so,
company should additionally develop an effective edge, make fact-based decisions, and
establish a clear comprehensive strategy.
 Create a technological new strategy that includes the following steps: Make a list of
short- and long-term goals. This should assist you in recognising possibilities as well as
any big obstacles that may arise during the process (Marr, 2016). This would aid in the
creation of a precise timetable, ensuring that chores are performed on schedule.
As a consequence, by executing the procedures outlined previously, David Green will be able
to start his firm and fulfil his objectives.
Explain the top management in charge of accounting for a company listed on the London
Securities Exchange
Accountancy is the procedure of documenting, assessing, and closing down operations in
terms of generating financial information and take choices. Managers and administrators of an
organization strategy are regarded as shareholders because they execute recommendations

depending on fiscal facts and analysis. Marks and Spencer is a limited-by-shares corporation
headquartered in London with a wide range of prospective value proposition providers.
 Administrators are in responsible of developing long-term strategy and implementing
them. The strategy is created in accordance with the company's objective. Accountancy
data is utilised to arrange, manage, and assure that consumers' selections are easy. It
allows customers to assess the company's reputation and standing.
 While delivering financial information to fund managers, businesses must examine and
assess their financial status (Nehf, 2016).
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
180
131
311

(M Abel declared bankruptcy and received the amount
in full settlement)
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. Make the ledger accounts in the books of Maurice and brothers.
a) GENERAL LEDGER – MAURICE 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
PART C
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

TOTALS (A – B - C) -48980
b) Explain how, in consideration of the COVID–19 outbreak, income for the year 2022 could be
increased or decreased
For several businesses, the year 2020 was among the most difficult in historical memory.
Considering the facts that numerous businesses were fully operational in January 2020, the
COVID-19 epidemic halted development throughout most parts of the globe by mid-March. This
indicated that spending substantially outpaced earnings. Regardless of the reality that perhaps the
business employees generate a substantial quantity of revenue, it is insufficient to pay its costs.
This might be because to the COVID-19 epidemic that has caused a drop in consumer spending,
resulting in reduced earnings. Smaller immediate repercussions, including a firm shutdown, to
prolonged period and secondary implications, like effects on corporate policy, are all likely
alternatives (Poon, Pollard and Chow, 2018).
CONCLUSION
According to the findings below, developing a company approach is critical when
opening a company. The fiscal position of the company is represented by the bookkeeping,
income reports, and entire income summary. On the financial statements, the operating revenue
can be seen. This article confirms Marks and Spencer, including its decision takers.

REFERENCES
Books and journals
Hamera, J., 2017. Unfinished Business: Michael Jackson, Detroit, and the Figural Economy of
American Deindustrialization. Oxford University Press.
Marr, B., 2016. Key Business Analytics: The 60+ business analysis tools every manager needs to
know. Pearson UK.
Nehf, J. P., 2016. Domain Names and Websites as Collateral: Managing Uncertainty in Secured
Financing Transactions. Available at SSRN 2756189.
Poon, J. P., Pollard, J. and Chow, Y. W., 2018. Resetting neoliberal values: lawmaking in
Malaysia's Islamic finance. Annals of the American Association of Geographers. 108(5).
pp.1442-1456.