Chapter 2 Transaction Analysis

Transactions: Every translation has two sides:

• You give something and
• You receive something

The Account:

• Assets = Liabilities + Stockholders' (Owners') Equity

Assets:

• Cash
• Accounts Receivable
• Notes Receivable
• Inventory
• Prepaid Expenses
• Land
• Buildings
• Equipment, Furniture, and Fixtures

Final Form of the Rules of Debit and Credit

Transaction Analysis

Chart of Accounts:

1. Balance sheet accounts: Assets, Liabilities, and Stockholders’ Equity
2. Income statement accounts: Revenues and Expenses