Chapter 2, Problem 20CE

To determine

Concept Introduction:

Transaction Analysis- The first step involved in the process of recording economic events in any business is to analyze the transaction. Transaction analysis is the process of analyzing each transaction to determine the effect of each transaction in two parts or dual effect on each element of an accounting equation so that the equation is in balance. This is shown as:

  $Assets=liabilities+Stockholdersequity$

Requirement 1:

To indicate the effect of transaction on assets, liabilities and stockholder’s equity when goods are sold to customers on credit.

To determine

Concept Introduction:

Transaction Analysis- The first step involved in the process of recording economic events in any business is to analyze the transaction. Transaction analysis is the process of analyzing each transaction to determine the effect of each transaction in two parts or dual effect on each element of an accounting equation so that the equation is in balance. This is shown as:

  $Assets=liabilities+Stockholdersequity$

Requirement 2:

To indicate the effect of transaction on assets, liabilities and stockholder’s equity when amounts are collected due from customers.

To determine

Concept Introduction:

Transaction Analysis- The first step involved in the process of recording economic events in any business is to analyze the transaction. Transaction analysis is the process of analyzing each transaction to determine the effect of each transaction in two parts or dual effect on each element of an accounting equation so that the equation is in balance. This is shown as:

  $Assets=liabilities+Stockholdersequity$

Requirement 3:

To specify the effect of transaction on assets, liabilities and stockholder’s equity when supplies are purchased on account.

To determine

Concept Introduction:

Transaction Analysis- The first step involved in the process of recording economic events in any business is to analyze the transaction. Transaction analysis is the process of analyzing each transaction to determine the effect of each transaction in two parts or dual effect on each element of an accounting equation so that the equation is in balance. This is shown as:

  $Assets=liabilities+Stockholdersequity$

Requirement 4:

To indicate the effect of transaction on assets, liabilities and stockholder’s equity when supplies are used for operations in business.