Topic 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 service business (e.g printing, labeling, laundry, cleaning services etc.)

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 relationship between the following accounting elements.

1. Asset and Equity - 1 transaction.
2. Asset and Asset - 1 transaction.
3. Asset and Liability - 1 transaction.
4. Asset and Owners Equity (Revenue)- 3 transactions.
5. Asset and Owners Equity (Expens - 2 transactions.
6. Liability and Owners Equity (Expense) - 1 transaction .
7. Asset and Owners Equity (Withdrawal) - 1 transaction.

TOPIC 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:

Based on requirement in Topic 1, prepare:

1. journal entry for each of the transaction (Please include the transaction on 1 January 2019- first investment)
2. post the transaction to the t-accounts and balance off accounts
3. Trial balance as at 31st January 2019.