Comprehensive Financial Report: Recording Business Transactions UWL

This report provides a detailed analysis of recording business transactions, encompassing journal entries, ledger accounts, and the preparation of an income statement. It also includes a discussion on factors affecting profit, such as the COVID-19 pandemic, and an analysis of financial ratios. The report uses real-world examples like Marks and Spencer to illustrate accounting decision-making. Furthermore, the document includes practical exercises such as creating journal entries and ledger accounts for fictional companies, offering a comprehensive overview of financial accounting principles and their application in business. Desklib offers a range of study tools and solved assignments to aid students in mastering these concepts.

Recording Business
Transactions

Table of Contents
ASSESSMENT 1.............................................................................................................................4
INTRODUCTION ..........................................................................................................................4
PART A...........................................................................................................................................4
Define the steps of staring the new venture of decorator............................................................4
Take a company which is listed on London Stock Exchange and define the decision makers
which have an involvement in the accounting............................................................................5
PART B............................................................................................................................................6
1. Record the journal entries in the F Polk books.......................................................................6
2. Make the ledger accounts in the books of Maurice and brothers............................................7
PART C..........................................................................................................................................10
Create a income statement for B Morre....................................................................................10
b) Explain what the profit can be increased or decreased for the year 2022, considering the
Covid – 19 pandemic. ..............................................................................................................10
CONCLUSION .............................................................................................................................11
REFERENCES..............................................................................................................................12
ASSESSMENT 2...........................................................................................................................13
INTRODUCTION.........................................................................................................................13
PART A.........................................................................................................................................13
a) Record the double entry........................................................................................................13
b) General Ledgers....................................................................................................................14
c) Trial Balance.........................................................................................................................17
d) Prepare Income Statement ending on 31 October 2021.......................................................18
e) Make the statement of financial position..............................................................................18
f) What drawings are concerning small business about the holiday.........................................19
PART B..........................................................................................................................................20
a) Calculate the ratios from the above calculations for Anne's business..................................20
b) Assuming Anne's competitors ratio's averages, analyse the performance of Anne's firm.
Also explain the impact of Covid – 19 on the average ratio.....................................................20
CONCLUSION..............................................................................................................................21

REFERENCES..............................................................................................................................22

ASSESSMENT 1
INTRODUCTION
Business transaction is a financial state of an organisation which depicts the fiscal health
of the company. These are sorted in two groups, journals and ledgers. Journal records all the
fiscal entries of the business in a book. Ledgers gives the opening and the closing balance of the
different accounts mentioned in journals (Langemeier, 2020). In this report, an individual want
of set up a business of decorator, so the steps of setting up of the venture is mentioned. Further,
the decision makers need the assistance of financial accounting is explained of Marks and
Spencer. Then, the journal entries, ledgers, trial balance and income statement is made
considering the transaction details given.
PART A
Define the steps of staring the new venture of decorator.
David Green is a sole proprietor and want to start up a novel business of decorating. He is
aware of the accountability of all the debts which may incur to the company. Although, he dos
not know about the roles and responsibilities of starting of the enterprise. So he want a
consultation in some steps of opening of the business.
1. Make a model: To achieve success in the business, he needs to first frame a model, which
will be helpful in organising of the business activities. The activities and services which
are to be offered must be decided.
2. Build a strategy for the business: A strategy is made to achieve success which can be
achieved only when the vision and mission will be clear (Larson and et. al., 2017). For
this, one must set the competitive advantage and made the decision based on the fact and
plan a systematic growth for the undertaking.
3. Building of a business portfolio: It is like a brochure, which mentions the goals,
competencies and the initiatives which are taken or to be take by the company. It will
also have the details about the project which are to be carries out successfully in future. It
also highlights the information about the top executives, their skills and profession etc.

4. Find out the equipments needed: The management must first decide about what are the
instruments or materials needed for operation of the business activities. For example, in
decorating business, the drapes, balloons etc.
5. Build a technical road-map: The short and the long – term objectives must be decided. It
will help in understanding the possibilities and the hurdles which can come in the path of
fulfilling it (Li, Zhijun and Yingjie, 2021). It will also assist in setting a specific period of
time which will lead to completion of the tasks on time.
6. Social media presence: Now a days, people more prefer to search online about the
business proposals. So, it is crucial for David to create accounts on different social medial
platforms such as, Instagram, LinkedIn, Facebook etc. It will increase the visibility and
may help in getting the projects. The owner can also post some pictures or videos related
to the business, it will aid the customers in knowing more about the firm's work process.
7. Create a Network: Every business must engage in the activities related to the welfare of
the society, to promotes the sustainable environment. It increases the goodwill and help
in building a community which will promote the organisations. Creating more contacts is
a free promotion technique and it will also increase the customers.
Thus, by following the above steps, David Green can establish his business and achieve goals
which will helps in developing the firm as well.
Take a company which is listed on London Stock Exchange and define the decision makers
which have an involvement in the accounting.
Accounting is a process of recording, evaluating and concluding of the entries which
gives the accounting data and helps in decision – making. The goal of accountancy is to gives the
financial information about the business. It help in knowing about the fiscal position and
performance which can be used in taking decisions by the users (Neeraj and et. al., 2017).
Administrators at all levels of an organization structure are called decision – makers, since they
settle on choices dependent on bookkeeping information and facts. Marks and Spencer is listed
on the London Stock Exchange and numerous decision-makers and accountable for the position
of the company in the market. Acquisition, inducements, and the procurement of long-term
resources for foster labour and products could be considered. Exact data is important to

guarantee that the organization's business is beneficial. Every decision taken in the firm depends
directly or indirectly on the users of Marks and Spencer.
Decision-makers in Accounting:
1. Owners: They might check the pace of return accomplished using accounting data and
assess the results of the firm to those of comparable organizations.
2. Creditors: It can utilize bookkeeping information to evaluate the dependability and
capacity to reimburse the obligations of an enterprise.
3. Government: The public authority needs accounting information of the undertaking to
gather different kinds of taxes, such as direct and indirect (Osório, 2017).
4. Management: These are people who figure and make arrangements for the future.. The
plan is made according to the goals of the business. The customers of the accounting
information uses it to plan, control and simply decide. It helps them with evaluating the
presentation and position of the firm.
5. Investors: Before contributing, entrepreneur should survey and examine the monetary
condition using the accounting data of an organisation.
PART B
1. Record the journal entries in the F Polk books.
JOURNAL ENTRIES – F POLK
Date Particulars Debit Credit
01/09/21 Assets A/c
Fixtures
Stock
Debtors (105 + 311)
Bank
Cash
Creditors (229 + 80)
Capital
5700
2800
5200
416
1060
85
309
14952
01/09/21 Bad Debts 105

P Mullen
(Bad Debts written-off)
105
05/09/21 Syme Ltd
Office Fixtures
(Office fixtures bought through credit was written-off)
150
150
10/09/21 Bank
Bad Debts
M Abel
(M Abel declared bankruptcy and received the amount
in full settlement)
180
131
311
18/09/21 Machinery
Cash
Bank
Brown Ltd
(Purchased a machinery and the amount paid by
cheque, cash and on credit)
1800
100
500
1200
26/09/21 Brown Ltd
Bank
(Half of the amount due paid through cheque)
600
600
28/09/21 Insurance Expenses
Drawings
Bank
(Insurance expenses paid by bank but later realised that
£70 is of personal house)
60
70
130
2. Make the ledger accounts in the books of Maurice and brothers.
a) GENERAL LEDGER – MAURICE BROTHERS
Cash Account

Date Particulars Ref Amount Date Particulars Ref Amount
03/08/21 Bank 2800 15/08/21 Office Fixtures 110
19/08/21 Toyota Co. 8700
31/08/21 Balance c/d 6440 25/08/21 Bank 430
9240 9240
Bank Account
Date Particulars Ref Amount Date Particulars Ref Amount
03/08/21 Cash 2800
01/08/21 Capital 36800 04/08/21 Van 6200
25/08/21 Cash 430 05/08/21 Office Fixtures 1000
02/08/21 Loan Payable 12400 28/08/21 Office Fixtures 750
31/08/21 Balance c/d 38880
49630 49630
Van Account
Date Particulars Ref Amount Date Particulars Ref Amount
01/08/21 Capital 32000
04/08/21 Bank 6200 31/08/21 Balance c/d 46900
08/08/21 Toyota Co. 8700
46900 46900
Office Fixtures
Date Particulars Ref Amount Date Particulars Ref Amount
01/08/21 Capital 1200

05/08/21 Bank 1000
05/08/21 Sharp Office Ltd 2400 31/08/21 Balance c/d 5460
15/08/21 Cash 110
28/08/21 Bank 750
5460 5460
Sharp Office (Creditor)
Date Particulars Ref Amount Date Particulars Ref Amount
31/08/21 Balance c/d 2400 05/08/21 Office Fixtures 2400
2400 2400
Toyota Co. Accountable
Date Particulars Ref Amount Date Particulars Ref Amount
19/08/21 Cash 8700 08/08/21 Van 8700
8700 8700
Loan Payable Account
Date Particulars Ref Amount Date Particulars Ref Amount
31/08/21 Balance c/d 12400 02/08/21 Bank 12400
12400 12400
Capital Account
Date Particulars Ref Amount Date Particulars Ref Amount
31/08/21 Office Fixtures 1200
31/08/21 Van 32000 31/08/21 Balance c/d 70000
31/08/21 Bank 36800

70000 70000
b) Trial Balance
TRIAL BALANCE
Maurice & Brothers
Debit Credit
Bank 38880
Cash 6440
Van 46900
Office Fixtures 5460
Sharp Office Ltd (Creditor) 2400
Loan Payable 12400
Capital 70000
TOTAL 91240 91240
PART C
Create a income statement for B Morre.
Particulars Amount (£)
Sales 95000
Less: Sales Returns 3500
Less: Carriage Inwards 890
Net Sales (A) 90610
Opening Stock 18000
Purchases 110000
Less: Return Outwards 720
Less: Closing Stock 13000

Net Purchases (B) 114280
Motor Expenses 1400
Rent 7000
Telephone Charges 830
Wages and Salaries 14000
Insurance 1030
Office Expenses 800
Sundry Expenses 250
Operating Expenses (C) 25310
TOTALS (A – B - C) -48980
b) Explain what the profit can be increased or decreased for the year 2022, considering the Covid
– 19 pandemic.
For many companies, 2020 was one of the most challenging situations in recent times.
While most enterprises made a regular progress in early 2020, the Covid-19 pandemic
discontinued the progress in most part of the world in mid-March. From interruptions in day – to
– day activities to the complete closure of certain the firms.
According to the income statement, the company had suffered a loss (Wang and et. al., 2021).
This indicated that the expenses have exceeded revenue. However, sales from the organization
makes some money but cannot cover its expenses. This could be due to the Covid pandemic,
which has resulted in lower demand for the items and services and thus lower sales. The likely
consequences are numerous, ranging from small direct effects such as a business closure to
relatively long and indirect effects such as changes in business strategy. Understanding the
impact of the organization and the financial implications is critical for the business owner.

CONCLUSION
From the above report, it can be concluded that fixing a business strategy is crucial when
starting a business. The entry of the journal entry, general ledger and profit and loss account
reflects the company's financial position. The net profit is shown in the profit and loss account.
In this report, Marks and Spencer is taken and the decision-makers of the organisation is
explained.