Question

Big Sky Sports sells hunting and fishing equipment and provides guided hunting and fishing trips. Big Sky Sports is owned and operated by Joe Flannery, a well-known sports enthusiast and hunter. Joe’s wife, Pam, owns and operates Glacier Boutique, a women’s clothing store. Joe and Pam have established a trust fund to finance their children’s college education. The trust fund is maintained by Kalispell State Bank in the name of the children, Trey and Brooke.

a. For each of the following transactions, identify which of the entities listed should record the transaction in its records:
Glacier Boutique
Kalispell State Bank
Big Sky Sports
None of the above

1. Pam deposited a $2,000 personal check in the trust fund at Kalispell State Bank.

2. Pam purchased two dozen spring dresses from a Spokane designer for a special spring sale.

3. Joe paid a breeder’s fee for an English Springer Spaniel to be used as a hunting guide dog.

4. Pam authorized the trust fund to purchase mutual fund shares.

5. Joe paid a local doctor for his annual physical, which was required by the workmen’s compensation insurance policy carried by Big Sky Sports.

6. Received a cash advance from customers for a guided hunting trip.

7. Pam paid her dues to the YWCA.

8. Pam donated several dresses from inventory for a local charity auction for the benefit of a women’s abuse shelter.

9. Joe paid for dinner and a movie to celebrate their thirtieth wedding anniversary.

10. Joe paid for an advertisement in a hunters’ magazine.

b. What is a business transaction?

Answer 1

Answer(a):

Pam deposited a $2,000 personal check in the trust fund at Kalispell State Bank	Kalispell State Bank
Pam purchased two dozen spring dresses from a Spokane designer for a special spring sale	Glacier Boutique
Joe paid a breeder’s fee for an English Springer Spaniel to be used as a hunting guide dog.	Big Sky Sports
Pam authorized the trust fund to purchase mutual fund shares	Kalispell State Bank
Joe paid a local doctor for his annual physical, which was required by the workmen’s compensation insurance policy carried by Big Sky Sports.	Big Sky Sports
Received a cash advance from customers for a guided hunting trip	Big Sky Sports
Pam paid her dues to the YWCA	None of the above
Pam donated several dresses from inventory for a local charity auction for the benefit of a women’s abuse shelter.	Glacier Boutique
Joe paid for dinner and a movie to celebrate their thirtieth wedding anniversary	None of the above
Joe paid for an advertisement in a hunters’ magazine	Big Sky Sports

Answer(b): Business transaction- As the name suggests, business transaction is a monetary transaction related to a business entity, it may be sale and purchase of any item. Personal transactions of business owner are not considered business transactions. Only transactions related to firm, are considered biz. transactions.