Requirement 1: ACCOUNTING AND THE BUSINESS ENVIRONMENT. Have you ever dreamed of running of your own business? If so, where would you begin? How much money would you need? What type of business you plan to form? Or maybe, you would like to be an investor. There are a lot of decisions to make. And you dont have to be an accountant to make a good decision, but understanding accounting can assist you to answer these questions.

Required:

1. You are required to form a small merchandising business

2. Explain the name and nature of the business, location, mission and objectives of the company. Assume the business started on 1 January 2019. (5m)

3. List down the transactions incurred during the first month of operation. The transactions should cover the following:

i. Investment in the business (1 transaction)

ii. Purchase of inventories (2 transactions)

iii. Sale of inventories (2 transactions)

iv. Purchase return OR sales return (choose ONE (1) only) (1 transaction)

v. Purchase discount OR sales discount (choose ONE (1) only) (1 transaction)

Requirement 2: RECORDING BUSINESS TRANSACTIONS The procedure of accounting equation works well for handful transactions, but it is not very efficient if your business generates lots of transactions. The more efficient way to capture business transactions is by using the proper recording business transactions, account.

Required: 1. Based on Requirement 1, prepare:

a) journal entry for each of the transaction (using periodic inventory system) (7m)

b) post the transaction to the t-accounts and balance off accounts (7m)

c) trial balance as at 31st January 2019. (3.5m)

d) Statement of Profit or Loss for the month ended 31st January 2019 (4.5m)

e) Based on the requirement (d) above, give suggestion on how to improve the businesss performance (6 m)