Intermediate Accounting, 17th Edition
Intermediate Accounting, 17th Edition
17th Edition
ISBN: 9781119503682
Author: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
Publisher: WILEY
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Chapter 3, Problem 1Q
To determine

Business transaction: It is an activity that is measured through the medium of money, which affects the financial situation of the entity. The business transactions also affect the main elements in accounting such as “assets, capital, expenses, liabilities, and income.”

To determine the example for a series of below transactions.

Expert Solution & Answer
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Explanation of Solution

Accounts payable: This is shortly called AP, where the company purchase goods on credit and need to pay back in shorter time.

Accounts receivable: This is shortly termed AR, where the organization is expecting to receive money from their clients after delivery of their product.

a.

Statement: There is an decrease in the value of the asset and value of the liability.”

Example: “This statement represent the payment of an accounts payable.”

b.

Statement: There is a decrease in the value of the asset and increase in value of the another asset.”

Example: This statement represents that the company delivers the good and gets the profit after sale which represent the accounts receivable.

c.

Statement: There is a decrease in the value of one liability and increase in value of another liability.

Example: This statement represents the process of conversion from accounts payable to notes payable.

Conclusion

Thus, the statement is discussed with example.

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