Recording & Analyzing Business Transactions: Accounting Report

This report provides an overview of recording business transactions for a decorator business, emphasizing the importance of accurate record-keeping for strategic decision-making. It covers the essential steps for starting a decorator business in the UK, including naming the business, choosing a legal structure, creating a business plan, securing financial resources, developing advertising strategies, and complying with tax requirements. The report also discusses the role of accounting information for stakeholders, using Tesco as an example. Practical accounting aspects are illustrated through journal entries, ledger accounts, and the preparation of a trial balance and income statement. Finally, the report analyzes a company's financial performance from 2013 to 2021, noting fluctuating profitability and losses, and forecasts a negative performance for 2022 due to challenges such as the COVID-19 pandemic.

Recording…

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
PART A...........................................................................................................................................1
1...................................................................................................................................................1
2...................................................................................................................................................2
PART B...........................................................................................................................................3
1...................................................................................................................................................3
2...................................................................................................................................................5
PART C...........................................................................................................................................8
a)..................................................................................................................................................8
b)..................................................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Recording business transaction is process of keeping information regarding all the financial
activities conducted or particular period of time. in the current era, there is requirement of
making strategic decision on the basis of analysing performance of company. The current study
will give emphasis on having information regarding steps of starting the business as decorator.
This will include insights related with decision making stakeholders on the basis of accounting
information. It will give focus on providing journal entries, ledger, trial balance and income
statement. The present report will include forecasting of 2022 profitability on the basis of
previous performance.
MAIN BODY
PART A
1
There are various kinds of activities which are required to be followed by an entrepreneur in
order to successfully operate in UK sector. In UK, there are several steps which are needed to be
accomplished in respect to function smoothly. David Green has objective of operating as
decorator in the sector so that higher efficiency to build strong position can be obtained. The
steps which are needed to be emphasize by mentioned person are as follows:
 Initial step that David Green is needed to be followed includes giving emphasis on
having an idea regarding the name of business. This can lead him to obtain ability to
create differentiation identity in the industry.
 Deciding the legal structure of organization by evaluating the options such as sole
proprietor, partnership and company so that clarity of following steps can become
possible (Barrow, 2021). In the current case, David green will has decided to operate as
the sole proprietor in turn accomplishing goal of functioning as decorator an effectively
without facing any interference can become possible.
 Formulating the business plan through evaluating the crucial aspects such as objectives,
approaches, strategies, etc. so that ability to deal with prevailing level of competition in
market can become possible.
 Planning for financial resource through ascertaining the crucial aspects that need much
focus in turn higher productiveness to coordinate with changing circumstances can
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become possible. It permits to get the information for diverse sources of finance to
reduce cost of capital.
 Developing advertising technique to spared the alter about forms of services offered by
firm in order to highlight competitiveness in market. Buying insurance policy to make
sure higher security with offering services in turn higher trustworthiness and credibility
in the market can be maintained.
 Working with tax related activities by compliance with requirement of registering with
HMRC and self-assessment annual submission so that proper capability to overcome
legal complications can become possible. On the basis of this, it can be mentioned that
carrying forward to next step becomes easy for David green with overcoming such legal
requirements.
 Formulating recoding transaction system in the book keeping manner by applying double
entry approach can help in gaining crucial information that is effective in making
decision making process. On the basis of this, it can be mentioned that these are the
crucial steps that are needed to be followed for operating as decorator.
2
Tesco is listed on London Stock exchange which pay attention on operating in retail sector.
From the valuation it can be specified that there are number of stakeholders who are connected
with functioning of company and interested in evaluating performance so that strategic decision
can be made (Mukhtar and Bahormoz, 2021). Accounting is associated with recording,
analysing and summarizing performance of organization so that strategic decision requiring
information can be providing. There are various types of stakeholders who pay attention on
utilizing accounting information and considered to specialist that involves financial analyst,
manager & assistant of financial department, accountant, etc. This information can be useful for
having significant information that can allow to make strategic decision. The parties that are
interested in analysing information of TESCO involves internal and external stakeholders.
The internal stakeholders involve staff, management and owner pay attention on having
on having information that can incline effectiveness of particular decision making. Staff and
owner refer the data to evaluate how effective particular company is performing in turn better
decision for growth & development (Putra, 2019). Management use it to evaluate lacking areas
so that strategic approach of improvement can be obtained. On the other side, there are few
2

external stakeholders who concentrate on building effective decision such involves
competitors, customers, suppliers, creditor, etc. TESCO is an international organization that has
larger focus on offering sufficient details in order to adhere full disclosure. These all stakeholder
pay attention on gaining better tactic through ascertaining profitability, liquidity & efficiency in
turn better decision can be made.
PART B
1
Journal entries
3

4

2
Ledger accounts
5

6

7

PART C
a)
b)
8

On the basis of given infornation it can be specified that particular company’s
financial position is ineffective. The main reason behind cosnidering it is lack of effective is
unsufficient appliaction of activities that is leading to fluctuating pattern of profitability. From
the asssessmnet of above given information it can be mentioned that from the year 2013 to
2016 , the company is afcing upward movement in profitability (Amadi, Carrillo and Tuuli,
2018). There is fluctuating pattern of perforamce as profits are increasing & decreasing which
is negative sign. After year, 2019 firm is facing lossess till 2021 that is indicator if efefctive
performance of organization.
Forecasting performance of year 2022 performance has been conducted by using excel
tool which has helped to ascertain that there will be losse. The main reason that been
recognized for the prevailing performance is covid 19 pandemic situation. It has been
identified that company is unable to coordinate with changing circumstances which need to be
improved for having good stablity.
CONCLUSION
From the above report it can be concluded that recording business transaction is important
to build strategic decision for having smooth functioning. The current report has comprised
steps of starting business as decorator so that depth understanding can be obtained. The key
decision maker from the presented accountings statements are both internal & external
stakeholders. The report has involved journal entries, ledger, trial balance and income
statement and forecasted performance for upcoming year is negative.
9

REFERENCES
Books and Journals
Amadi, C., Carrillo, P. and Tuuli, M., 2018. Stakeholder management in PPP projects: external
stakeholders’ perspective. Built Environment Project and Asset Management.
Barrow, C., 2021. Starting a business for dummies. John Wiley & Sons.
Mukhtar, S.M. and Bahormoz, A., 2021. An integrative framework for stakeholder engagement:
reconciling and integrating stakeholders’ conflicting CSR priorities in management
decision-making. Journal of Decision Systems. pp.1-26.
Putra, Y. M., 2019. Analysis of Factors Affecting the Interests of SMEs Using Accounting
Applications. Journal of Economics and Business. 2(3). pp.818-826.
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