Explain the difference between external events and internal events. Give an example of each type of event.

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Answer 1

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Chapter 2, Problem 2.1Q

Explain the difference between external events and internal events. Give an example of each type of event.

Expert Solution & Answer

To determine

AccountingCycle:

Accounting cycle refers to the process of recording a business transaction in the books of accounts. This cycle concludes when the financial statements are prepared.

To Explain: The difference between external events, and internal events, and to give examples for them.

Explanation of Solution

External events are the events which involves an exchange transaction between the two parties, which is between a company, and another entity. Whereas, internal events are the events which does not involve any exchange transaction but such events affect the financial position of the company.
Examples of external events are as follows:

1. a) Borrowing of cash from bank
1. b) Purchase of inventory
1. c) Sale to a customer

Examples of internal events are as follows:

1. a) Accrual of salary expense
1. b) Depreciation expense
1. c) Expiry of prepaid rent

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Answer 2

Textbook Question

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Chapter 2, Problem 2.1Q

Explain the difference between external events and internal events. Give an example of each type of event.

Expert Solution & Answer

To determine

AccountingCycle:

Accounting cycle refers to the process of recording a business transaction in the books of accounts. This cycle concludes when the financial statements are prepared.

To Explain: The difference between external events, and internal events, and to give examples for them.

Explanation of Solution

External events are the events which involves an exchange transaction between the two parties, which is between a company, and another entity. Whereas, internal events are the events which does not involve any exchange transaction but such events affect the financial position of the company.
Examples of external events are as follows:

1. a) Borrowing of cash from bank
1. b) Purchase of inventory
1. c) Sale to a customer

Examples of internal events are as follows:

1. a) Accrual of salary expense
1. b) Depreciation expense
1. c) Expiry of prepaid rent

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Answer 3

Textbook Question

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Chapter 2, Problem 2.1Q

Explain the difference between external events and internal events. Give an example of each type of event.

Expert Solution & Answer

To determine

AccountingCycle:

Accounting cycle refers to the process of recording a business transaction in the books of accounts. This cycle concludes when the financial statements are prepared.

To Explain: The difference between external events, and internal events, and to give examples for them.

Explanation of Solution

External events are the events which involves an exchange transaction between the two parties, which is between a company, and another entity. Whereas, internal events are the events which does not involve any exchange transaction but such events affect the financial position of the company.
Examples of external events are as follows:

1. a) Borrowing of cash from bank
1. b) Purchase of inventory
1. c) Sale to a customer

Examples of internal events are as follows:

1. a) Accrual of salary expense
1. b) Depreciation expense
1. c) Expiry of prepaid rent

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Answer 4

Textbook Question

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Chapter 2, Problem 2.1Q

Explain the difference between external events and internal events. Give an example of each type of event.

Expert Solution & Answer

To determine

AccountingCycle:

Accounting cycle refers to the process of recording a business transaction in the books of accounts. This cycle concludes when the financial statements are prepared.

To Explain: The difference between external events, and internal events, and to give examples for them.

Explanation of Solution

External events are the events which involves an exchange transaction between the two parties, which is between a company, and another entity. Whereas, internal events are the events which does not involve any exchange transaction but such events affect the financial position of the company.
Examples of external events are as follows:

1. a) Borrowing of cash from bank
1. b) Purchase of inventory
1. c) Sale to a customer

Examples of internal events are as follows:

1. a) Accrual of salary expense
1. b) Depreciation expense
1. c) Expiry of prepaid rent

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Answer 5

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Answer 6

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Answer 7

Expert Solution & Answer

To determine

AccountingCycle:

Accounting cycle refers to the process of recording a business transaction in the books of accounts. This cycle concludes when the financial statements are prepared.

To Explain: The difference between external events, and internal events, and to give examples for them.

Explanation of Solution

External events are the events which involves an exchange transaction between the two parties, which is between a company, and another entity. Whereas, internal events are the events which does not involve any exchange transaction but such events affect the financial position of the company.
Examples of external events are as follows:

1. a) Borrowing of cash from bank
1. b) Purchase of inventory
1. c) Sale to a customer

Examples of internal events are as follows:

1. a) Accrual of salary expense
1. b) Depreciation expense
1. c) Expiry of prepaid rent

Answer 8

Expert Solution & Answer

To determine

AccountingCycle:

Accounting cycle refers to the process of recording a business transaction in the books of accounts. This cycle concludes when the financial statements are prepared.

To Explain: The difference between external events, and internal events, and to give examples for them.

Explanation of Solution

External events are the events which involves an exchange transaction between the two parties, which is between a company, and another entity. Whereas, internal events are the events which does not involve any exchange transaction but such events affect the financial position of the company.
Examples of external events are as follows:

1. a) Borrowing of cash from bank
1. b) Purchase of inventory
1. c) Sale to a customer

Examples of internal events are as follows:

1. a) Accrual of salary expense
1. b) Depreciation expense
1. c) Expiry of prepaid rent

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

To determine

AccountingCycle:

Accounting cycle refers to the process of recording a business transaction in the books of accounts. This cycle concludes when the financial statements are prepared.

To Explain: The difference between external events, and internal events, and to give examples for them.

Answer 12

Explanation of Solution

External events are the events which involves an exchange transaction between the two parties, which is between a company, and another entity. Whereas, internal events are the events which does not involve any exchange transaction but such events affect the financial position of the company.
Examples of external events are as follows:

1. a) Borrowing of cash from bank
1. b) Purchase of inventory
1. c) Sale to a customer

Examples of internal events are as follows:

1. a) Accrual of salary expense
1. b) Depreciation expense
1. c) Expiry of prepaid rent

Answer 13

Ch. 2 - Explain the difference between external events and...Ch. 2 - Each economic event or transaction will have a...Ch. 2 - What is the purpose of a journal? What is the...Ch. 2 - Explain the difference between permanent accounts...Ch. 2 - Describe how debits and credits affect assets,...Ch. 2 - Describe how debits and credits affect temporary...Ch. 2 - What is the first step in the accounting...Ch. 2 - Prob. 2.8Q Ch. 2 - Prob. 2.9Q Ch. 2 - Prob. 2.10Q

Explain the difference between external events and internal events. Give an example of each type of event.

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