Nobaira Mehreen Hassan Company: Accounting Information System Report

This report provides a detailed analysis of the financial statements of Nobaira Mehreen Hassan Company, a business engaged in the trade of socks. The analysis focuses on the trial balance, income statement, and balance sheet for May, examining transactions through ledger accounts and financial statements. Key findings include a significant cost of goods sold contributing to a net loss, a breakdown of operating expenses highlighting rent as a major component, and an overview of current assets and liabilities. The report uses charts to visualize expense distribution and asset composition, offering insights into the company's financial position and performance during the period. Desklib provides access to similar solved assignments for students.

Running head: ACCOUNTING FOR INFORMATION SYSTEM
Accounting for Information System
Name of the Student:
Name of the University:
Author’s Note:

1
ACCOUNTING FOR INFORMATION SYSTEM
Table of Contents
Introduction......................................................................................................................................2
Analysis of the Books of Accounts.................................................................................................2
Reference.........................................................................................................................................6
Appendix..........................................................................................................................................7

2
ACCOUNTING FOR INFORMATION SYSTEM
Introduction
The main focus of the report is to analysis the financial statement of Nobaira Mehreen
Hassan Company which is engaged in the trade business of socks. The financial analysis is to be
considered on the basis of the trial balance, income statement and balance sheet which is
prepared by the business during the month of May. The transactions which the business has
undertaken during the month has been done on the basis of preparation of Ledger accounts and
financial statements of the company.
Analysis of the Books of Accounts
As per the trial balance which is prepared by the company, the sales of the company is
shown to be $ 9,829 and the expenses which the business incurs for carrying out the production
of goods is shown as Cost of good sold which is shown to be $ 5,932. The cost of good sold of
the company is shown to be of significant amount which is the basic reason due to which the
company has incurred a loss during the year as shown in the profit and loss account of the
business (Ballings et al. 2015). The trial balance is prepared by the business is to show numerical
accuracy of the statement and the entries which are made by the business.
The profit and loss account show how much profit the business can make during the
month. The company shows all expenses and income during the month which the business earns
or accrue (Ciftci and Darrough 2015). The primary source of income for the business is shown to
be generated from the sales of socks. The business also has made investments from which the
company earns interest income which is shown for the month as $ 706. In order to present the
expenses which the business incurring which are related to operating activities of the business
are shown in a pie chart form as given below:

3
ACCOUNTING FOR INFORMATION SYSTEM
Depreciation
4%
Interest Expense
28%
Motor Vehicle
Expenses
7%
Rent
61%
Operating Expenses
Figure 1: (Pie Chart Showing Expenses of the Company for the Month of May)
Source: (Created by Author)
As per the pie chart which is shown in the above figure, rent expenses forms a major part
of the operating expenses of the company. Rent is a fixed expense which the business has to
incur even if the business does not carry out production. The other expenses which the business
has incurred during the month are depreciation which is related to the assets of the business
arising from general wear and tear, Interest expenses which the business incurs on the servicing
of the loan which the business has shown in the balance sheet of the business. In addition to this
there is a motor vehicle expenses which is related to the general maintenance of the Motor
Vehicles during the month. The expenses which relates to rent is shown as $ 4,545 which as per
the above graph forms 61% of the total expenses which the business incurs during the month.
The interest expenses which are incurred by the business amounts to $ 2,042 which is shown to
be 28% of the total expenses which is incurred by the business during the month. The business

4
ACCOUNTING FOR INFORMATION SYSTEM
has incurred a loss during the month which is not a favorable outcome for the business and the
same is shown in the profit and loss account for the month as $ 2,822.
The balance sheet of the business is shown in the appendix section which reflects the
financial position of the business during the month (Goldsmith, Lipsey and Mendelson 2015).
The current asset of the business is shown in the graph which is presented below:
A c c o u n t s R e c e i v a b l e
I n t e r e s t R e c e i v a b l e
I n v e n t o r y
O ffi c e S u p p l i e s
P r e p a i d A d v e r ti s i n g
P r e p a i d R e n t
0.00
5,000.00
10,000.00
15,000.00
20,000.00
25,000.00
3921.05
705.65
12468.1
2960.91
22727.27 22727.27
Current Assets
Figure 2: (Chart Showing Current Assets of the Company for the Month of May)
Source: (Created by Author)
The above graph which is shown above shows that a major part of the current asset is
made up of Prepaid expenses which the business has incurred during the month. Such prepaid
expenses of the business are prepaid advertisement and prepaid rent expenses (Lee and Parker
2014). Both the prepaid expense of the business is shown to be $ 22,727.27 for the month. The
inventory of the company is shown to be $ 12,468.10 as per the balance sheet. The current
liabilities of the business of the business consist of account payables, GST expenses and the

5
ACCOUNTING FOR INFORMATION SYSTEM
interest payable by the business. The total equity of the business $ 200,000 shows the owner’s
capital of the business.

6
ACCOUNTING FOR INFORMATION SYSTEM
Reference
Ballings, M., Van den Poel, D., Hespeels, N. and Gryp, R., 2015. Evaluating multiple classifiers
for stock price direction prediction. Expert Systems with Applications, 42(20), pp.7046-7056.
Ciftci, M. and Darrough, M., 2015. What Explains the Valuation Difference between Intangible‐
intensive Profit and Loss Firms?. Journal of Business Finance & Accounting, 42(1-2), pp.138-
166.
Goldsmith, R.W., Lipsey, R.E. and Mendelson, M., 2015. Studies in the national balance sheet
of the United States (Vol. 1). Princeton University Press.
Lee, T.A. and Parker, R.H., 2014. Company financial statements: an essay in business history
1830–1950. In Evolution of Corporate Financial Reporting (RLE Accounting)(pp. 27-51).
Routledge.

7
ACCOUNTING FOR INFORMATION SYSTEM
Appendix

8
ACCOUNTING FOR INFORMATION SYSTEM

9
ACCOUNTING FOR INFORMATION SYSTEM