Gemma Lynns Catering Services Term Paper Example | Topics and Well Written Essays - 3000 words

Gemma Lynns Catering Services - Term Paper Example The report will be divided accordingly: The first section of the report will discuss the principles of bookkeeping and accounting, giving an understanding as to why financial statements are important and how Gemma can use these financial statements to aid her in decision making. It will also answer the Gemma's first question regarding her profits. The second part of the report will discuss Gemma's business as it compares with the industry figures. Based on the figures, the report will also indicate the areas in her business that require improvements and provide suggestions on how these can be improved. The third part of the report will discuss Gemma's plans for expansion and provide suggestions on how profitability can be ensured during and after expansion. A section to coordinate the whole report will come after and provide concluding comments regarding the whole report. Gemma's catering business is a private enterprise under single proprietorship. Even though this does not obligate her to publish her accounts, it does not exclude her from having to document her financial records for taxation and other legal purposes. There are at least three minimum documents needed to properly audit her company's finances. Among these are the balance sheet, the income statement, and the cash flow statement, each of which has a specific purpose within a business enterprise.The balance sheet, from which a company's assets are balanced with their liabilities, "shows a 'snapshot' of the firm at the particular point in time"(Blandon, 2001). It contains important information such as the company's assets (cash in the bank, stock, debtors, and fixed assets), liabilities (creditors, tax payables, other types of liabilities such as long-term loans), and net worth.