Financial Accounting Ch 2

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Author:
krobosu
ID:
184678
Filename:
Financial Accounting Ch 2
Updated:
2012-11-20 15:26:12
Tags:
Financial Accounting Basics
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Description:
the second instalment of the financial accounting study help
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  1. Transactions the firm conducts with a separate economic entity is classified as a _________ transaction.
    External
  2. An event that affects the financial position of the ompany but does not include an exhange with a separate economic entity is a ___________ transaction?
    Internal
  3. What are four examples of an External Transaction?
    • 1. Selling Products to a customer
    • 2. Purchasing supplies from a vendor
    • 3. Paying Salaries to an employee
    • 4. borrowing money from a bank
  4. What are two examples of Internal transactions?
    • 1. Using supplies on hand
    • 2. earning revenues after having received cash in advance from customer
  5. What are the six steps in measuring external transactions?
    • 1. Identify Accounts: Use source documents to identify accounts afffected by an external transaction
    • 2. Accounting Equation: Analyze the impact of the transaction on the accounting equation
    • 3. Debit or Credit: Assess whether the transaction results in a debit or a credit to the account balance
    • 4. Record: Record the transaction
    • 5. Post: Post the transaction to the T-account in the general ledger
    • 6. Trial Balance: prepare a trial balance

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