Scribd
Upload
5 views12 pages

5 Business Transaction and Analysis

Uploaded by

belanomagallaneswendyann
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
5 views12 pages

5 Business Transaction and Analysis

Uploaded by

belanomagallaneswendyann
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 12

Business Transactions and

their Analysis
Coverage of
Discussion:
•Accounting Cycle

•Steps in Accouting
Cycle
•Types of Events

•Journalizing
The Accounting Cycle
• Represents the steps or procedures
used to record transactions and
prepared financial statements.
• The accounting cycle implements the
accounting processes of identifying,
recording and communicating economic
information.
Steps in the Accounting Cycle
• Identifying and analyzing business
documents or transactions
• Journalizing
• Posting
• Preparing the Unadjusted Trial Balance
• Preparing the adjusting entries
• Preparing the adjusted trial balance (or
worksheet preparation)
• Preparing the financial statements
• Closing the books
• Preparing the post-closing trial balance
• Recording of reversing entries
Identifying and analyzing
transactions and
events
• It involves identifying a business
transaction and analyzing whether or not
that transaction affects the assets,
liabilities, equity, income or expenses
of the business.
▫ Accountable events – needs to be recorded in the
books
▫ Non-accountable events – not recorded
• Transactions are normally identified from
“source documents”
Illustration for Source
Documents
• Sales invoice VS Official
receipt

Rendering
Sales of Goods
of
Services
Purchase order – Delivery Receipt –
used by the buyer to document signed by
indicate the types, the receiver of a
quantities and agreed shipment
prices for products or acknowledging the
services. receipts of goods.
Bank Statement – report
Bank Deposit Slip –
issued by the bank that shows
evidences a deposit to a
the deposits and withdrawals
bank account.
during the period and the
cumulative balance of the
depositor’s bank account.
Check – an
instrumnent that
orders a bank to pay
the person named on
the check or the
bearer thereof for a
definite amount of
money from the
drawer’s bank account.

Statement of Account
– is a report a business
send to its customers
listing the transactions
with the customers
during the perid.
Types of Events:
• External Events – transactions that
involves the business and another
external entity.
• Internal Events – events that do not
involve an external party.
Journalizin
g
• After an accountable event is identified and
analyzed, the second step is to record it in
the journal by means of a journal entry. This
recording process is called journalizing.
Date Account Title to be debited P xx
Account title to be P xx
credited short desccription
of the transaction
• Date – chronological order
• Account titles and amounts to be debited and credited –
each transaction is recorded in the journal in two parts –
debit and credit
• Short description of the transaction – short
description of the transaction for future reference.
Formats of Journal Entry
• Simple Journal Entry – one that
contains a
single debit and a single cerdit
element.
• Compound Journal Entry – one that
contains
two or more debits or
credits
DRILLS!
!!
• A business had the following transactions during the month of
October 20x1.
Oct. 1 The owner contributed P 800,000 cash to the business
Oct. 3 The business purchased inventory worth P 100,000 on
cash basis
Oct. 4 The business purchased inventory worth P 400,000 on
account
Oct. 8 The business sold goods for P 300,000 cash. The cost of
the goods sold is P 120,000
Oct. 12 The business sold goods for 700,000, on account.
The cost of goods sold is 280,000.
Oct. 15 The business paid P 400,000 accounts payable
Oct. 17 The business collected P 700,000 accounts receivable
Oct. 18 The business purchased equipment worth P280,000 for
cash
Oct. 22 The owner withdrew P20,000 from the business
Oct. 31
• Provide The businesspaid
the journal salaries
entries to record expense of P
the transactions 50,000.
and the effect on the
accouting equation.

You might also like