, MNE3701 Assignment 2 (COMPLETE ANSWERS)
Semester 1 2025 – DUE 8 May 2025 2300PM; 100% correct
solutions and explanations.
Question 1
Constructing Financial Statements for a Small Business
Constructing financial statements is an essential process for
tracking the financial health of a small business. The key
financial statements include the income statement, statement
of financial position (balance sheet), and cash flow statement.
Here is a step-by-step explanation with practical examples:
1. Gather Source Documents
Start by collecting all necessary financial records such as:
Invoices issued and received
Bank statements
Receipts for expenses
Loan agreements
Payroll records
Example: If I own a small bakery, I collect sales receipts from
customers, supplier invoices for flour and sugar, and wage slips
for my employees.
2. Record Transactions in the Accounting System
Semester 1 2025 – DUE 8 May 2025 2300PM; 100% correct
solutions and explanations.
Question 1
Constructing Financial Statements for a Small Business
Constructing financial statements is an essential process for
tracking the financial health of a small business. The key
financial statements include the income statement, statement
of financial position (balance sheet), and cash flow statement.
Here is a step-by-step explanation with practical examples:
1. Gather Source Documents
Start by collecting all necessary financial records such as:
Invoices issued and received
Bank statements
Receipts for expenses
Loan agreements
Payroll records
Example: If I own a small bakery, I collect sales receipts from
customers, supplier invoices for flour and sugar, and wage slips
for my employees.
2. Record Transactions in the Accounting System
