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Analyzing Transactions
Principles of Accounting Practice Session #1 Analyzing Transactions By Laurie L. Swanson
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Analyzing a Transaction
Recall the three questions you should ask when analyzing transactions. What accounts are involved in the transaction? What is the classification of each account? What is happening to each account—is it increasing or decreasing?
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Analyzing a Transaction
Remember also that most transactions contain clues that help you identify the accounts involved in the transaction. Further recall that each transaction will involve at least two different accounts.
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Transaction Analysis Sheet
Use the Transaction Analysis Sheet to help you analyze the following transactions. Do not worry at this time about the order of your answers on the Transaction Analysis Sheet. These transactions continue to use Jones Career Consulting. Be sure to view this presentation as a Slide Show for the interaction to work properly.
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Transaction Analysis Sheet
1. Provided $250 in services for a customer on account. What Accounts? What Classification? What Effect? 1. Accounts Receivable Asset Increasing Consulting Income Revenue Increasing
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Transaction Analysis Sheet
2. Paid employees salaries totaling $3,000. What Accounts? What Classification? What Effect? 2. Salaries Expense Expense Increasing Cash Asset Decreasing
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Transaction Analysis Sheet
3. Purchased office equipment on account, $1,200. What Accounts? What Classification? What Effect? 3. Office Equipment Asset Increasing Accounts Payable Liability Increasing
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Transaction Analysis Sheet
4. Received payment from a customer for services previously rendered. What Accounts? What Classification? What Effect? 4. Cash Asset Increasing Accounts Receivable Asset Decreasing
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Transaction Analysis Sheet
5. Karen Jones, the owner, withdrew $1,000 for personal use. What Accounts? What Classification? What Effect? 5. Cash Asset Decreasing Karen Jones, Drawing Owner’s Equity Increasing
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Transaction Analysis Sheet
6. Paid $350 for advertising. What Accounts? What Classification? What Effect? 6. Cash Asset Decreasing Advertising Expense Expense Increasing
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Transaction Analysis Sheet
7. Performed $225 in services for a customer who paid cash. What Accounts? What Classification? What Effect? 7. Cash Asset Increasing Consulting Income Revenue Increasing
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Transaction Analysis Sheet
8. Karen placed a personal computer with a market value of $800 into service for her business. What Accounts? What Classification? What Effect? 8. Computer Asset Increasing Karen Jones, Capital Owner’s Equity Increasing
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Transaction Analysis Sheet
9. Paid the $1,200 owed for previously purchased office equipment. What Accounts? What Classification? What Effect? 9. Accounts Payable Liability Decreasing Cash Asset Decreasing
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Analyzing Transactions
This Concludes Practice Session #1 Analyzing Transactions
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