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Basic Accounting Transaction with EXAMPLES

Basic Accounting Transaction with EXAMPLES

Accounting Process for Transaction Analysis - WorldWide Webster

On the accounting process, you'll recall from class the accounting process has three major steps. 

Three major steps

  • step one is transaction analysis 
  • step two records the transactions using the debit credit framework.
  • step three summarizes the transactions by posting them to T accounts which we can use to create the balance sheet.

so let's begin with our example you see here we've got Shelly Webster who started a web design.

business on December the 1st 2015 and we've given you some transactions that happened during December Shelly's business you can see here that she had a shareholder invest in her business she also borrowed some money from the bank we can see run her business she bought some equipment in C and in D she purchased and received.

some supplies are on credit so we're going to have to deal with the credit aspect of it you can see an e throughout December she also signed a contract to do some web design for a customer but she's not going to do the website development until next month which is January 2016 so we'll have to talk about a and C how we want to handle that when we do our transaction analysis again we know she had some depth.

so she's paying them down an F some of them she buys some more supplies and then she bought a little more equipment okay which she paid in cash and put someone into account and then she also ordered a server so that she can house her data and that order that she placed indicated that the server would be received next month.

Business Transaction

learning one more accounting term and the term for today is business transaction before we have a look at the meaning of this term let's try and understand this with the help of an example.

this is John a shopkeeper and he sells burgers fries and a coal drink he's a seller of goods this is Tina she's a customer and she's a buyer of goods she wants to buy these burgers fries and a cold drink for money so their is a seller and there is a buyer tina wants to buy this burger fries and cold ring and when she is going to buy this from Jon she is going to give him money.

so in this transaction, Tina is going to get this stuff and in return, she is going to pay money to join so there's a seller there's a buyer there is a product that is sold and in return for this the seller is going to receive money from the buyer so when john provides tina with this stuff he is going to receive money from tina in return.

so that is what is a transaction where the buyer and seller exchange goods or services and in return, the seller receives money the business transaction is a financial transaction entered by two parties that involve the transfer or exchange of goods or services in exchange for money

Business Transactions and Accounting Equation

will learn about how businesses conduct transactions, how these transactions affect the financial position of the business, and the concept of the accounting equation.

let's begin by understanding what is a transaction

  • A transaction means in a business a transaction takes place by exchanging goods or services for money.
  • In accounting, a transaction is defined as a completed sale or exchange of goods or services.
  • In exchange, there are at least two equal actions something is given and something is received. for example, buying a computer borrowing money for the business making a sale receiving money paying salaries, etc are all business transactions that involve money and will need to be recorded.

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