Recording Business Transactions: Impact of COVID-19 Analysis

This assignment delves into the core principles of financial accounting, focusing on the meticulous process of recording business transactions. It begins with an introduction to the concept of accounting and its significance in financial reporting, followed by an exploration of the decision-makers who rely on accounting information and their specific needs. The assignment then presents a detailed examination of journal entries, general ledgers, and trial balances, using examples to illustrate the practical application of these accounting tools. Furthermore, the assignment covers the preparation of an income statement and concludes with an insightful analysis of the impact of the COVID-19 pandemic on financial statements, highlighting the challenges and considerations businesses faced during this period. The solution provides a comprehensive understanding of accounting principles and their practical application in analyzing business performance and financial decision-making.

Recording Business Transaction

Contents
INTRODUCTION...........................................................................................................................................3
PART 1.........................................................................................................................................................3
PART 2.........................................................................................................................................................6
PART 3.........................................................................................................................................................8
PART 4.......................................................................................................................................................11
CONCLUSION.............................................................................................................................................14
REFERENCES..............................................................................................................................................15

INTRODUCTION
Accounting applies to a sequence or series of tasks related to the tracking, assessment, analysis
and definition within the business division of an employee's self financial results data, carrying
out with any of reporting assistance (Graham, Raedy and Shackelford, 2012). Financial reporting
is essentially solely a formal organizational vocabulary and related practices. This allows the
company to reliably produce ongoing activities that can be defined according to their specific use
and importance. These statements and records shall be made in just such a manner as to help in
the evaluation of the financial results, along with the stock options. Several issues related to
income and spending transaction logging are included in the report. The analysis discusses
financial decisions to what extent they require accounting expertise, accounting benefits and
disadvantages, as well as practical operations to record business activities and to file financial
statements.
PART 1
Recognize who are decision-makers and describe their requirement/needs with regard to
accounting-information.
The judgment is a person, typically in management, who makes challenging decisions that have a
strong impact on the market. Employee staffs who are good decision makers understand how to
quickly solve challenges and use critical reasoning problem - solving skills quicker. They will
weigh the different choices easily and settle on the result that fits the company and its workers
better.
In financial accounting, the compilation, review and explanation of all financial information and
the way in which it can be presented in reporting has been used (Berry and Jarvis, 2013). For the
development of a suitable financial and fiscal plan and policy, certain types of reports providing
financial details are valuable. This organization is in a position to cope with its performance in
the immediate future. But still being able to offer excellent consumer offers to end customers.
The determination of the increasing production, the resource preparation of press campaigns, and
even the collection of various strategies and technologies to conduct different duties and
responsibility are all operations beginning from recruiting to shooting. And all of these decisions

are taken by executive executives and general managers. Decision leaders, such as Tesco, are
mainly senior management employees within the business and have an advisory board based on
multinational UK retailers, which would be the primary decision of the company. The
Association of Boards of Directors supports the employees in the Organization by greater
corporate performance through different viewpoints, perspectives and views. The Board shall
consist of the President, the Junior Executive Director and the Company's Chief Executive
Officer, the Managing Partner and a group of semi-officers. Tesco's board is comprised of:
 Jhon Allan Non-executive Chairman
 Ken Murphy Group Chief Executive
 Alan Stewart CFO
 Stewart Gilliland Independent Non-executive Director.
 Byron Grote Independent Non-executive Director.
 Alison Platt Independent Non-executive Director.
 Mikael Olsson Independent Non-executive Director.
 Steve Golsby Independent Non-executive Director.
 Simon Patterson Independent Non-executive Director.
They need to have an accounting system for strategic, monitoring and decision-making on the
corporation's sales prices, revenue and flexibility. Judgment is involved in determining the
collective's potential in the future to increase revenues (Broadbent and Laughlin, 2013). It is able
to determine the liquidity of the organization and performing its financial commitments on
schedule. By different numbers, such as proportion of debt-equity, leverage rates, etc. In order to
understand the short-term or lengthier financial stability of the company, they need financial
reports. Likewise, the criterion for broader and longer funds can be defined using the declaration
of cash flows. Financial expenses reflect all company-related accounting operations in a
summary, allowing the executive team, and general managers, to include this data in the
development of tasks in a feasible and convenient way. The financial accounts are drawn on the
basis of common standards and procedures which are equivalent around the sector. This helps
them to separate it from other competitors in order to put them into the transaction of the
consumer. In order to take investment decisions, it sets out a managerial system and whether
such decisions are appropriate and commercially viable for the business to take. Furthermore,
projections and predictions often concentrate on the fiscal data of the products and on changes

due to market factors. This is also essential not only for similar evaluation, but also for the sense
in which semi data captures crucial data.
Merits and demerits of accounting within a business unit:
Advantages:
Performance comparison
Comparing one cycle of initiated financial statements with others makes it simpler. Executives
can also review the detailed documentation of all financial and accounting practices in
compliance with company requirements (Taipaleenmäki and Ikäheimo, 2013).
Decision-making
For management, decisions are made smoother as financial transactions are thoroughly planned
for. Financial reports enable administrators of numerous organizations to plan and coordinate
activities for their upcoming projects. This provides statistics on sales outflows and inflows, and
also on profits and expenditures to make it feasible to measure the deficit or surplus within the
capital to be handled in a realistic time frame (Ezzamel, 2012). This also serves to provide fraud
detection and monitoring with transparency and oversight.
Disadvantage:
Describes accounting information, in the monetary context,
Non-fiscal spending is incapable of making an impact on financial statements. Auditors should
only be tested on actions of a financial nature. Evidently, financial events are viewed in
monetary terms (Hopper, 2012). As a consequence, it presents an imperfect vision during the
implementation of laws and the assessment of the causes. In the case of a towing company,
owners cannot on the basis of accounting books, make judgments on other considerations, such
as economic, social and other factors.
Statistics on accounting can be subject to bias.

Financial practitioners have a personal influence on the given accounting period. The
management accountant can use various cost accounting statistics, principles of difference,
income identifiers and working capital, etc to quantify the income of the business.
PART 2
A. Journal Entries of David for the month February 2020
Journal Entries
Date Details DT (£) CT (£)
01/02/20 Asma Ltd. A/c … Dr. 350
To office Fixtures A/c
(Being office fixtures returns to Asma Ltd.)
350
04/02/20 Bad debt A/c...........Dr. 85
To S. Keyes 85
(Being bad debts written off from S. Keyes)
09/02/20 Machinery A/c …......Dr. 2300
To TS Co. A/c 2100
To bank A/c 200
(Being Purchased a machine through TS Co.
to be used by the firm. The overall purchase
value of machine is £2,300. The owner paid

only 200 in form of a cheque and the
remainder of purchase value will continue
as credit)
13/02/20 Bank A/c …........Dr. 220
Bad Debt A/c..........Dr. 50
To S. Hill A/c 270
(Being £220 received from debtor S. Hill
and remaining 50 has been bad debt due to
bankruptcy)
20/02/20 Drawings A/c ….........Dr. 180
To purchase A/c 180
(Being amount withdraw to purchase goods
for owner’s personal use)
26/02/20 Drawing A/c..........Dr. 85
To insurance A/c 85
(Being personal insurance premium debited
to business books not stand corrected)
28/02/20 TS company A/c …........Dr. 1050
To bank A/c 1050

(Being half payment of machinery paid by
owner to TS company)
PART 3
A. General Ledger of Pearce & Sons
Ledgers Accounts
(Amounts in GBP)
Date Particulars Amounts Date Details Amounts
01/02/20 By bank A/c 21500
01/02/20 By office
fixture A/c
800
01/02/20 By Van A/c 2500
29/02/20 To balance c/f 47300
Total 4300 Total 4300
Bank Account
Date Particulars Amounts Date Details Amounts
03/02/20 By cash A/c 1500 01/02/20 To capital A/c 21500
04/02/20 By Van A/c 4800 02/02/20 To Loan A/c 2500
19/02/20 By Nissan
company A/c
5200 25/02/20 To cash A/c 350

28/02/20 By balance c/f 12230
Total 24350 Total 24350
Van Account
Date Particulars Amounts Date Details Amounts
01/02/20 To capital A/c 2500
04/02/20 To bank A/c 4800
08/02/20 To Nissan
company A/c
5200
29/02/20 By balance c/f 35000
Total 35000 Total 35000
Quick office Ltd Account
Date Particulars Amounts Date Details Amounts
05/02/20 By office
fixture A/c
1100
29/02/20 To balance c/f 1100
Total 1100 Total 1100
Cash Account
Date Particulars Amounts Date Details Amounts
15/02/20 By Office
Fixture A/c
70 03/02/20 To bank A/c 1500

25/02/20 By bank A/c 350
29/02/20 By balance c/f 1080
Total 1500 Total 1500
Nissan company Account
Date Particulars Amounts Date Details Amounts
08/02/20 By van A/c 5200 19/02/20 To bank A/c 5200
Total 5200 Total 5200
Office Fixture Account
Date Particulars Amounts Date Details Amounts
01/02/20 To Capital A/c 800
05/02/20 To Quick
Office Ltd A/c
1100
15/02/20 To Cash A/c 70
28/02/20 To Bank A/c 620
29/02/20 By Balance c/f 2590
Total 2590 Total 2590
Loan Account
Date Particulars Amounts Date Details Amounts

02/02/20 By Bank A/c 2500
29/02/20 By Balance
c/f
2500
Total 2500 Total 2500
B. Balance up accounts and extract trail balance as at 30 February 2019.
Trial Balance (At month ending 29/02/20)
(Amount in GBP)
Details Debit Credit
Capital account 47300
Cash account 1080
Van account 35000
Bank account 12230
Quick office Ltd. Account 1100
Office fixture account 2590
Loan account 2500
Total 50900 50900
PART 4
Drafting income statement of Airman company year ending 30th Sept 2019.
Profit and Loss Account
( For year ending 30th September 2020)

Particulars Amount Particulars Amount
Opening Stock 36000 Sales 80000
Purchases 150000 Less: Returns
Inwards
-2000 78000
Less: Returns
Outwards
-600 149400 Closing Stock 120000
Carriage Inwards 720
Gross Profit c/f 11880
Total 198000 Total 198000
Carriage Outwards 400 Gross Profit c/d 11880
Motor Expenses 1200
Rent 5000
Telephone Charges 620
Wages and Salaries 32000
Insurance 830
Office Expenses 600
Sundry Expenses 300

Net profit / (loss) -29070
Total 11880 Total 11880
Impacts of the COVID -19 pandemic on income statement.
Business units require economic, financial and cultural resilience for development and success.
Volatility causes a decline in the strength and efficiency of the company, as well as the
accumulation of budget deficits in market sectors such as Airman, who have been economically
feasible for 10 years since 2009 and are facing failures in the present decade. Only sales and
expenditures which are negligible in business as well as explicitly due to COVID-19 must be
known as COVID-19 when assessing the effect of COVID-19. Expenditures remain available
which if there was no COVID-19 outbreak, could not be raised or sustained and are therefore
unlikely to recur until the consequences have fully receded (Demski, 2013). The continuing
revenue and expenses that may have been received or accrued are really not accumulated with
respect to COVID-19. They are not known to be sales or expenses due solely to COVID and
should nevertheless not be seen as an income statement. For starters, idle salaries for employees;
operating expenses of process equipment when production is stopped; lease and service expenses
incurred during intermittent disruptions. An estimation of the sums of incremental revenue and
expenditure directly attributable to COVID-19 will require a judgment on the level of the
incremental revenue and expenditure attributed to COVID-19, the amount of which is dependent
on the following facts and circumstances, and a declaration to that effect may be essential.
Specific types of taxation and spending will be more accurately measured with respect to
COVID-19. For instance: incremental health and safety expenses involved as result of a control
or avoidance of spoilage; immediate risk incurred to staff; fines for deficiencies or non-
compliance with said arrangements relating to the termination of production facilities; lease
compromises made by the debtor as a direct result of COVID-19. Owing to a short space of time
between the financial accounts and the influenza situation, this has been recognized that the
operations of the airman corporation covid-19 will be restricted to the first two periods from Sep
2019 to Mar 2020. After Mar, it was observed that due to the effects of lock-down in the country,
every company has been faced with many drops in production, delivery system and sales,

Airman Company is also faced with losses of income to the production process, along with the
rise in inward and outward shipping (Peterson, 2013). There is also a revenue deficit that limits
customer appetite for goods and the business must pay running expenses accordingly.
Consequently, this influence on the function and work of the performance of the business has
been investigated. As long as Airman is participating with this finance business, they will
experience a hazard which they have reported in their documents. Covid-19 developed disorder
is unusual and unusual. This uncertainty is designed to decide how far this epidemic will impact
the commercial activity of the organization how much it will influence the financial status of the
business. There is still no warrant for a distinction of patterns from existing years over the past
10 years. Indeed the effect of the outbreak on the actual prospects of the financial year cannot be
measured directly.
CONCLUSION
From the main report, it was reported that monitoring is a vital business function that enables
companies to control the financial plan and sustain strategic decisions. Accounting information is
usually used to make recommendations to achieve clear organizational targets for judgment.

REFERENCES
Graham, J.R., Raedy, J.S. and Shackelford, D.A., 2012. Research in accounting for income
taxes. Journal of Accounting and Economics, 53(1-2), pp.412-434.
Berry, A. and Jarvis, R., 2013. Accounting in a business context. Springer.
Broadbent, J. and Laughlin, R., 2013. Accounting control and controlling accounting:
Interdisciplinary and critical perspectives. Emerald Group Publishing.
Ezzamel, M., 2012. Accounting and order (Vol. 12). Routledge.
Hopper, T., 2012. Handbook of accounting and development. Edward Elgar Publishing.
Taipaleenmäki, J. and Ikäheimo, S., 2013. On the convergence of management accounting and
financial accounting–the role of information technology in accounting
change. International Journal of Accounting Information Systems, 14(4), pp.321-348.
Demski, J., 2013. Managerial uses of accounting information. Springer Science & Business
Media.
Peterson, S.J., 2013. Construction accounting and financial management (Vol. 2). Upper Saddle
River, NJ: Pearson.