Business Transactions, Ledgers, and Financial Statements Analysis

This report provides a detailed analysis of recording business transactions and preparing financial statements. It begins by outlining the stages of starting a business, emphasizing legal compliance, structuring the organization, and securing funding. The report then identifies key decision-makers who rely on accounting information, such as internal stakeholders like owners and managers, and external stakeholders like investors and government agencies. The practical application is demonstrated through journal entries for September and August 2021, ledger postings, and a trial balance for ABC Enterprises. Furthermore, the report includes an income statement for B Moore for the year ending September 30, 2021, and a profitability forecast for 2022, utilizing trend analysis to project future performance, noting the impact of events like COVID-19 on profitability. The document is contributed by a student and available on Desklib, a platform offering AI-based study tools and solved assignments.

RECORDING BUSINESS
TRANSACTIONS

TABLE OF CONTENT
PART A...........................................................................................................................................1
1) Explaining stages for starting business...................................................................................1
2 Providing decision makers referred to in the given statement..................................................2
PART B...........................................................................................................................................4
1) Journal entries for the transactions of September 2021 is enumerated below:.......................4
2) Journal entries for August 2021 in the books of ABC enterprises presented below:..............5
a) Record the transactions in ledgers of Maurice & brothers......................................................5
b) Extracting Trial Balance..........................................................................................................7
3)..................................................................................................................................................8
a) Income Statement for B Moore for the year ending 30th September 2021..............................8
b) Forecasting B More's profitability for the year 2022..............................................................8
REFERENCES..............................................................................................................................10

PART A
1) Explaining stages for starting business
In the current era, there are several requirements which are required to be followed by
organization so that higher ability to operate effectively can become possible. There are several
rules and regulations which are needed to be followed by person in order avoid any legal
complication. David Green can following steps to operate a new business as decorator.
 The one of the initial stage that is required to be taken into consideration by the specified
sole trader is checking the legality of the business. Operating as decorator is legal in UK
so that proper ability to proceed for business can be obtained by him.
 The second step that is required to be followed is making the legal structure of
organization so that appropriate evaluation of the rule & regulation, etc can be taken into
proceeding. This can provide assistance in having proper strategy, policies etc to obtain
stability.
 Writing the business so that setting of objectives, methods of attracting customers, etc
can be done (De Lazzari, 2018). In addition to this, it includes focusing non evaluating
different methods of raising funds, managing operational activities, etc can become
possible.
 Formulating financing & funding is next stage that contribute in meeting appropriate
capabilities to ensure scale of operation which will be used. David Green need to analyze
the extent of capital available to meet the requirements of operating successfully.
 In order to be successful in effective manner it becomes essential to focus on executing
effectual and appropriate advertising technique so that creative measures to attract
customers can become possible (Morley and et.al., 2021). In the specific industry of the
UK it is important to pay attention on assessing how effectively firm can attract
customers by providing information about offering services can become possible.
 In the next stage much emphasis should be given on having insurance in turn ability to
protect crucial assets & practices can be done effectively. It is one of the crucial stage as
it contribute in obtaining the capability to decline the situation of threats, losses, etc. This
is one of the major component that can provide ability to meet the objectives via
optimum utilization of resources.
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 The one of the legal step that is highly demanded in the UK is registering with HMRC
and submitting annual self assessment. It legal liability which is expected to be overcome
from the businesses in order to have smooth functioning.
 For having clarity in the overall proceeding of the business it is important to concentrate
on developing system for recording business transaction so that stability operate
effectively can be attained. It can help in making sound decision by involving all crucial
factors that can influence functioning of business.
 For operating as decorator in the particular sector it is essential to concentrate on having
proper fair & accurate guidelines so that relevant action conducting can be done. It
involves applying appropriate accounting concepts, police, etc to make reliable reports.
2 Providing decision makers referred to in the given statement
Accounting play crucial role in providing important information for business decision by
recording, analyzing and interpreting transaction. There are several types of stakeholders who
pay attention on the information so proper information to make decision can become possible/
there are few specialist who uses accounting for makings significant decision such as finance
assistant & manager, accountant, analyst, etc Morrison is one of the international organizational
that operates in retail sector (Brown and et.al., 2019). There are internal & external stakeholders
who concentrate on the accounting information which needs to make strategic decision by
involving all the monetary aspects regarding present, past and future.
Internal stakeholders are those who have control over the operational practices which
comprises owner, managers and employees (San-Jose, Mendizabal and Retolaza, 2020). The
management of the organization highly focus on receiving significant aspects such as
profitability, efficiency and liquidity. Employees of the company with help of accounting
information can largely concentrate on achieving proper insights related with financial position
so that appropriate personal growth & development can be measured. The provided statement is
basically taken into the consideration for having depth information so that fair & precise
decision can be made.
External stakeholders includes employees, investors, competitors, suppliers, financial
institutions, lenders, government agencies, etc. In order to make the sound decision it is crucial
for the enterprise to concentrate on providing significant level of information to these
stakeholders can formulate relevant, reliable, accurate, etc based decision. As being an
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international organization company need to give full disclosure so that transparency can be
attained (Birt and et.al., 2020). In addition to this, accounting permits the company to share the
details regarding credibility, trade receivables, payable, current assets, etc possessing within
firm. Morrison as being player in the international environment need to focus making good
relationship with stakeholders so that proper functioning can be derived. From the evaluation it
can be articulated that accounting play significant role in providing important information so
that stakeholders can make significant and strategic decision.
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PART B
1) Journal entries for the transactions of September 2021 is enumerated below:
4

2) Journal entries for August 2021 in the books of ABC enterprises presented below:
a) Record the transactions in ledgers of Maurice & brothers
5

6

b) Extracting Trial Balance
Trial balance of ABC Enterprise as at 31 August 2021
7

3)
a) Income Statement for B Moore for the year ending 30th September 2021
b) Forecasting B More's profitability for the year 2022
From the evaluation of the given information it can be specified that performance of the
organization is in the fluctuating trend. The main reason behind stating at as non constant
directional moving pattern of growth due to increasing & decreasing of profits for the specified
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period. Forecasting of profit for the upcoming year can be exerted by conducting trend analysis.
It is helpful in measuring the performance of the organization via obtaining an equation. On the
basis of the provided information it can be specified that from the year 2013bto 2016 there is
increasing performance whereas from 2017 to 2021 there is continuous fluctuation.
Y (2022)= 1326x+121793
= 1326(9)+12793
= 11934 +12793
= 24727
On the basis of this it can be interpreted that covid 19 has largely affected the profitability for
the year 2021. In the year 2022 the performance of the organization will be improved as the
forecast profitability is positive.
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REFERENCES
Books and Journals
Birt, J. and et.al., 2020. Accounting: Business reporting for decision making. John Wiley &
Sons.
Brown, C and et.al., 2019. Accounting for business adaptations in economic disruption
models. Journal of Infrastructure Systems, 25(1), p.04019001.
Morley, J. and et.al., 2021. Operationalising AI ethics: barriers, enablers and next steps. AI &
SOCIETY, pp.1-13.
San-Jose, L., Mendizabal, X. and Retolaza, J. L., 2020. Social Accounting and Business
Legitimacy. Handbook of Business Legitimacy: Responsibility, Ethics and Society,
pp.967-981.
De Lazzari, M. A., 2018. Sustainability-inspired business startups (SiBS): An exploratory study
of early-stage UK companies from the creative industry. University of Surrey (United
Kingdom).
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