Assessment Task Mr. Sameer wants to open a small consultancy service business. He struggles a bit with accounting because his specialisation is computing and engineering. He wants to fully understand the accounting principles and learn the basics of bookkeeping for internal purposes. He hired your services as accountant. You need to prepare a report of 2,000 words addressed to Mr. Sameer. The structure of the report should be as follows: 1. Introduction (300 words) 1.1. Discuss the financial statements for small business operations, 1.2.
Enumerate and give examples of the users of financial statements. II. Discussion (1500 words) 2.1 Discuss the following accounting concepts and principles: a. Accrual concept b. Economic entity C. Going concern d. Revenue and cost recognition e. Full disclosure 2.2 Give examples of financial transactions relevant to Mr. Sameer that involves: a. Investment of money in the business (1 transaction) b. Performance of consultancy services for cash and credit (2 transactions) c. Payment of expenses (3 transactions) d. Purchase of assets for cash and credit (2 transactions) e. Collection of cash accounts (1 transaction) d. Payment of accounts by cash (1 transaction) 2.3 From the financial transactions in 2.2, prepare the pro-forma templates for the following: a. Journal entries b. Ledger accounts C. Trial balance III. Recommendation (200 words) • Explain with Mr. Sameer the importance of record-keeping.