Accounting Systems and Processes: July 2019 Transactions

This assignment solution covers accounting systems and processes for Pete's Handyman Services. It begins with preparing journal entries for July 2019 transactions, followed by creating T-accounts and an adjusted trial balance. The solution then includes the preparation of an income statement, balance sheet, and statement of owner's equity. Furthermore, the assignment calculates and evaluates the business's current and debt ratios. The solution also delves into the history of accounting and explores ethical principles in the code of ethics, along with measures to be taken in ethical dilemmas. The document provides detailed workings, including adjusting entries, and analyzes the financial performance and position of the business based on the provided transactions.

Running head: ACCOUNTING SYSTEMS AND PROCESSES
Accounting Systems and Processes
Name of the Student:
Name of the University:
Authors Note:

ACCOUNTING SYSTEMS AND PROCESSES
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Table of Contents
Question 1:.................................................................................................................................2
i) Preparing journal entries for July 2019 transactions:.............................................................2
ii) Preparing the T-account for the transactions:........................................................................4
iii) Preparing the Adjusted Trial Balance:.................................................................................7
iv) Preparing the income statement, Balance sheet and statement of equity changes:..............8
v) Calculating and evaluating the business current ratio and debt ratio:.................................10
Question 2:...............................................................................................................................10
Analysing the history of accounting:.......................................................................................10
Question 3:...............................................................................................................................15
i) Listing and explaining each of the ethical principles in the code of ethics:.........................15
ii) Indicating the measures that need to be taken by the accountant in ethical dilemma:........16
References and Bibliography:..................................................................................................17

ACCOUNTING SYSTEMS AND PROCESSES
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Question 1:
i) Preparing journal entries for July 2019 transactions:
Date Particulars Amount Amount
7/1/2019 Equipment………...........Dr $4,200.00
To Notes Payables $4,200.00
Purchased a tool trailer
7/2/2019 Account Payables……….Dr $300.00
To Bank $300.00
Paid to creditors
7/4/2019 Account Receivables……….Dr $700.00
To Service revenue $700.00
Provided handyman services on credit
7/7/2019 Bank………………….Dr $500.00
To Accounts receivable $500.00
Received cash for services provided on
credit
7/8/2019 Unearned revenue…….Dr $600.00
To Service revenue $600.00
Provided services
7/9/2019 Supplies……………….Dr $350.00
To Bank $350.00
Cash paid for supplies
7/10/2019 Account Receivables……….Dr $1,300.00
To Service revenue $1,300.00
Services provided on credit
7/12/2019 Drawings…………………….Dr $2,500.00
To Bank $2,500.00
Cash withdrawal for personal use
7/14/2019 Bank………………….Dr $1,250.00
To Service revenue $1,250.00
Provided services and paid in cash
7/15/2019 Fuel……………………..Dr $80.00

ACCOUNTING SYSTEMS AND PROCESSES
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To Bank $80.00
Paid cash for fuel
7/16/2019 Bank………………….Dr $1,300.00
To Accounts receivable $1,300.00
Received cash for services provided on
credit
7/22/2019 Account Receivables……….Dr $500.00
To Service revenue $500.00
Services provided on credit
7/23/2019 Unearned revenue…….Dr $2,600.00
To Bank $2,600.00
Received cash for services provided on
credit
7/23/2019 Prepaid advertisement………………….Dr $1,200.00
To Bank $1,200.00
Paid in advance for advertisement
7/23/2019 Bank………………….Dr $700.00
To Accounts receivable $700.00
Received cash for services provided on
credit
7/26/2019 Drawings…………………….Dr $2,500.00
To Bank $2,500.00
Cash withdrawal for personal use
7/26/2019 Bank………………….Dr $280.00
To Service revenue $280.00
Received cash for services provided
7/30/2019 Prepaid Insurance………………….Dr $320.00
To Bank $320.00
Paid in advance for Insurance
7/31/2019 Notes Payable…..................Dr $350.00
Interest expense….............Dr $50.00
To Bank $400.00
Payment for loan instalment
7/31/2019 Repairs…............................Dr $320.00
To Accounts payable $320.00
Expenses accrued on repairs

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7/31/2019 Telephone expense….....................Dr $150.00
To Bank $150.00
Paid cash for telephone expenses
Adjustment entries
Date Particulars Amount Amount
31-07-2019 Depreciation expense…...........Dr $180.00
To Accumulated depreciation Equip $80.00
To Accumulated depreciation Motor $100.00
Recording the depreciation
31-07-2019 Supplies expense….............Dr $490.00
To Supplies $490.00
Used supplies during the month
31-07-2019 Insurance expense $300.00
To Prepaid insurance $300.00
Insurance expense
ii) Preparing the T-account for the transactions:
Bank
Balance b/d 3600
Accounts payable 300
Accounts
receivable 500 Supplies 350
Service revenue 1250 Pete Smith, drawings 2500
Accounts
receivable 1300 Motor vehicle expenses 80
Accounts
receivable 2600 Prepaid expenses 1200
Accounts
receivable 700 Pete Smith, drawings 2500
Service revenue 280 Prepaid expenses 320
Notes Payable 350
Interest expense 50
Telephone 150
Balance c/d 2430
10230 10230
Accumulated depreciation Equipment
Balance c/d 880 Balance b/d 800

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Depreciation 80
880
Pete Smith, capital
Balance c/d 13600 Balance b/d 13600
13600 13600
Insurance
Prepaid expenses 300 Balance c/d 300
300 300
Telephone
Bank 150 Balance c/d 150
150 150
Accounts receivable
Balance b/d 800 Bank 500
Service revenue 700 Bank 1300
Service revenue 1300 Bank 700
Service revenue 500 Balance c/d 800
3300 3300
Motor vehicle
Balance b/d
1200
0 Balance c/d 12000
1200
0 12000
Pete Smith, drawings
Bank 2500 Balance c/d 5000
Bank 2500
5000 5000
Interest expense
Bank 50 Balance c/d 50
50 50

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Notes Payable
Bank 350 Equipment 4200
Balance c/d 3850
4200 4200
Prepaid expenses
Balance b/d 300 Balance c/d 620
Bank 320
620 620
Accumulated depreciation motor vehicle
Balance c/d 3700 Balance b/d 3600
Depreciation 100
3700 3700
Service revenue
Balance c/d 4630 Accounts receivable 700
Accounts receivable 1300
Unearned revenue 600
Bank 1250
Accounts receivable 500
Bank 280
4630 4630
Motor vehicle expenses
Bank 80 Balance c/d 80
80 80
Supplies
Balance b/d 400 Balance c/d 750
Bank 350
750 750
Accounts payable
Bank 300 Balance b/d 300
Balance c/d 320 Repairs 320
620 620

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Advertising
Bank 1200 Balance c/d 1200
1200 1200
Repairs
Accounts
payable 320 Balance c/d 320
320 320
Equipment
Balance b/d 1800 Balance c/d 6000
Notes Payable 4200
6000 6000
Unearned revenue
Service revenue 600 Balance b/d 600
Balance c/d 2600 Bank 2600
3200 3200
Depreciation
Accumulated depreciation Equipment 80 180
Accumulated depreciation motor
vehicle 100
180 180
Supplies expense
Supplies 490 Balance c/d 490
490 490
iii) Preparing the Adjusted Trial Balance:
Pete's Handyman Services
Trial Balance
as at 31st July 2019
Unadjusted Adjustments Adjusted
Particulars Debit $ Credit $
Debit
$
Credit
$ Debit $ Credit $

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Bank
$2,430.0
0
$2,430.0
0
Accounts receivable $800.00 $800.00
Prepaid expenses $620.00
$300.0
0 $320.00
Supplies $750.00
$490.0
0 $260.00
Equipment
$6,000.0
0
$6,000.0
0
Less: Accumulated
depreciation $800.00 $80.00 $880.00
Motor vehicle
$12,000.
00
$12,000.
00
Less: Accumulated
depreciation
$3,600.0
0
$100.0
0
$3,700.0
0
Accounts payable $320.00 $320.00
Unearned revenue
$2,600.0
0
$2,600.0
0
Notes Payable
$3,850.0
0
$3,850.0
0
Pete Smith, capital
$13,600.
00
$13,600.
00
Pete Smith, drawings
$5,000.0
0
$5,000.0
0
Service revenue
$4,630.0
0
$4,630.0
0
Advertising
$1,200.0
0
$1,200.0
0
Depreciation
$180.0
0 $180.00
Insurance
$300.0
0 $300.00
Interest expense $50.00 $50.00
Motor vehicle expenses $80.00 $80.00
Repairs $320.00 $320.00
Supplies expense
$490.0
0 $490.00
Telephone $150.00 $150.00
Total
$29,400.
00
$29,400.
00
$970.0
0
$970.0
0
$29,580.
00
$29,580.
00
iv) Preparing the income statement, Balance sheet and statement of equity changes:
Pete's Handyman Services
Statement of Income
as at 31st July 2019

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Particulars Amount Amount
Service revenue $4,630.00
Expenses
Advertising
$1,200.0
0
Depreciation $180.00
Insurance $300.00
Interest expense $50.00
Motor vehicle expenses $80.00
Repairs $320.00
Supplies expense $490.00
Telephone $150.00 $2,770.00
Net Income $1,860.00
Pete's Handyman Services
Balance Sheet
as at 31st July 2019
Particulars Amount Amount
Current Assets
Bank $2,430.00
Accounts receivable $800.00
Prepaid expenses $320.00
Supplies $260.00 $3,810.00
Non-Current assets
Equipment $6,000.00
Less: Accumulated depreciation $880.00 $5,120.00
Motor vehicle $12,000.00
Less: Accumulated depreciation $3,700.00 $8,300.00
Total Assets $17,230.00
Current Liabilities
Accounts payable $320.00
Unearned revenue $2,600.00 $2,920.00
Non-current Liabilities
Notes Payable $3,850.00
Total Liabilities $6,770.00
Net Assets $10,460.00
Owners’ Equity
Pete Smith, capital $10,460.00
Total Equity $10,460.00

ACCOUNTING SYSTEMS AND PROCESSES
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Pete's Handyman Services
Statement of Owner's Capital
as at 31st July 2019
Particulars Amount Amount
Pete Smith, capital $13,600.00
Net Income $1,860.00 $15,460.00
Less Drawings $5,000.00
Total $10,460.00
v) Calculating and evaluating the business current ratio and debt ratio:
Particulars Value
Current Ratio 1.30
Debt Ratio 0.39
The above table provides information about the current ratio and debt ratio of Pete's
Handyman Services. The analysis has mainly stated that the organisation’s overall current
ratio position is not appropriate, as the normal valuation needs to be above or at least 2.
However, the current debt ratio of the company is at 0.39, which is appropriate and indicates
steady level of debt within the organisation.
Question 2:
Analysing the history of accounting:
The accountancy history directly traces back to ancient civilizations, which indicate
that the system is more than thousands of years old. The events recorded in history indirectly
indicate that accounting dates back to ancient Mesopotamia where adequate development in
writing counting and money was developed, which the Babylonians and Egyptians can
identify as the early auditing system. However, the detailed financial information was
identified during the Roman Empire led government, which directly recorded all the relevant

ACCOUNTING SYSTEMS AND PROCESSES
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events and financial transactions to depict the financial conditions of a town. The manuscripts
that was similar to the financial management book was written by Chanakya during the
Mauryan empire where the book name Arthashasthra containing the detailed aspects of
maintaining the financial books of accounts for a Sovereign state. The detailed information
that was provided in the book during the Mauryan Empire directly related the progress that
has been made throughout history in accounting. Therefore, it has been detected that the
maintenance of financial accounts or accountancy has been present in human history for a
longer duration where it allowed Sovereign Nations to detect the level of their financial
capability and treasury amount. Thus, detailed financial accounting was an essential part of
maintaining and creating an empire since ancient times (Brown, 2014).
The progress of accounting is directly e sub divided in four different aspects, which
contains Ancient History, Roman Empire, Mediaeval or Renaissance period, and Modern
Professional Accounting. The different segments of the accounting history directly indicate
about the progress and the improvements that were conducted in the field of accountancy to
improve the financial management and accounting conditions of both servant missions and
companies in later years. There were adequate early developments of accounting and
expansion of the role of an accountant, which was laid during the ancient times. The timeline
or the time period of the accounting development are depicted as follows.
Ancient History: One of the accounting records that is dated back for more than 7000 years
ago was found in Mesopotamia where are all the relevant documents from the ancient
civilization directly identifies the list of expenditures and goods received during trade. The
development of accounting directly indicates about the add element money and numbers that
work directly indicating the trading activities that were conducted in the civilization during
the era (D. Carnegie, 2014). The development of accounting is closely related to the
improvements that were conducted with money, writing and counting that have been