Notes Ch 4

Notes Ch 4 - Jorge Rossello Busi 100 Ch 4 Notes I. The...

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Jorge Rossello Busi 100 Ch 4 Notes I. The Essential Role of Transaction Analysis a. Transactions: Events that have a financial impact on an organization that must be gathered, sorted, classified and turned into financial statements by means of an accounting system. b. Transaction Analysis (Example Transactions and their Effects, plus notes) i. Accounts Payable: Short-term liabilities to pay for goods and services that have been acquired. ii. Company buys inventory on credit for $2,000. 1. Inventory (asset) increases by $2,000. 2. Accounts payable (liability) increases by $2,000. iii. Company pays salary of $300 to employee for work performed last week. 1. Salary expense (expense) increased by $300. 2. Cash (asset) decreased by $300. iv. Company borrows $9,000 from a bank. 1. Cash (asset) increases by $9,000. 2. Note payable (liability) increases by $9,000. II. The Effects Caused by Common Transactions a. Inventory bought for $2,000 is sold for $5,000 on account. i.
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This note was uploaded on 04/26/2011 for the course BUSI 100 taught by Professor Unknown during the Spring '07 term at UNC.

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Notes Ch 4 - Jorge Rossello Busi 100 Ch 4 Notes I. The...

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