ACCT212 Accounting System Discussions

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ACCT212 Accounting System Discussions
Please provide an example that covers the type of entry represented, what it means…

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ACCT212 Accounting System Discussions

ACCT212 Accounting System Discussions

Week 2 All Students Posts – 58 Pages 

Students are encouraged to use online collaboration tools to create a submission 2-4 minutes in length, explaining research you have done on the different types of accrual entries and what they mean. Please provide an example that covers the type of entry represented, what it means and why it is being used.

Transaction Analysis is the process of reconciling the differences made to each side of the equation with each financial transaction occurs. Below are some sample transactions to get a better understanding of how the analysis and equation work.

The accounting equation for a brand new company will look like this:

Assets = Liabilities + Owner’s Equity

$0             $0                $0

Transaction 1: The owner deposits $5000 in the checking account to begin operations

Assets = Liabilities + Owner’s Equity

+$5000    $0              + $5000

The asset “Cash” is increased by $5000 and the Owner’s Equity is increased $5000. The business owes the owner $5000.

Transaction 2: The business purchases a computer, on credit, for $2500.

Assets = Liabilities + Owner’s Equity

+$2500   +$2500         $

The asset “Computers” is increased by $2500 and the liability is also increased $2500 because the business now owns the store $2500.

Transaction 3: The business purchases office supplies using $550 cash.

Assets = Liabilities + Owner’s Equity

+$550
-$550

The asset “Office Supplies” is increased $550 and the asset “Cash” is decreased $550.

Transaction 4: A business purchases a building for $100,000 with a $25,000 cash down-payment and a loan for the $75,000 outstanding.

Assets = Liabilities + Owner’s Equity

+$100,000  +75,000    -$25,000

More than two accounts are affected by this transaction. The asset “Building” increases by $100,000, the asset “Cash” decreases by $25,000, and the liability “Bank Loan” increases by $75,000. The net result is that both sides of the equation increase by…