Financial Analysis: Recording Transactions for Anne York's Business

This practical assignment focuses on recording business transactions for Anne York's sole trader business and preparing financial statements. It includes recording journal entries in T-accounts, balancing accounts in ledger format, formulating a trial balance, preparing an income statement, and formulating a financial position. The assignment also involves calculating financial ratios to evaluate the organization's performance and assess the impact of COVID-19. A letter to the owner addresses concerns regarding withdrawals and their impact on the business. The analysis covers profitability, liquidity, and efficiency ratios, providing insights into the company's financial health and areas for improvement.

RECORDING BUSINESS
TRANSACTION

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................2
PART A...........................................................................................................................................2
a) Recording journal entries in T account.................................................................................2
b) Balancing the account in ledger format...................................................................................5
c) Formulating trial balance.......................................................................................................16
d) Preparing income statement..................................................................................................18
e) Formulating financial position...............................................................................................20
f) Writing letter..........................................................................................................................22
PART B.........................................................................................................................................23
a) Determining ratios.................................................................................................................23
b) Evaluating organizational performance and impact of covid 19...........................................26
CONCLUSION..............................................................................................................................27
REFERENCES..............................................................................................................................28

INTRODUCTION
Recording business transaction refers to keeping information about the all the transaction
that are executed for particular span of period. In the current era, competition has inclined which
require firm to pay attention on having significant information regarding the prevailing
circumstances so that higher level of ability to make strategic decision can become possible.
There is major need to pay attention on having relevant understanding about the basic tactics
which can allow to incline efficiency of conducting operational activities to get success. There
are several aspects which are required to be taken into consideration so that higher profitability
& stability providing decision can be formulated. The current study will pay attention on having
significant information regarding journal entries, balancing the account to get an opening
balance, trial balance, income statements, financial position and writing letter. This current study
will give emphasis on calculating ratios and having information related with evaluating
performance of company along with assessing impact of covid 19.
1

MAIN BODY
PART A
a) Recording journal entries in T account
2

3

4

b) Balancing the account in ledger format
5

6

7

8

9

10