In accounting its important to understand that there may be events that occur that are not...

In accounting its important to understand that there may be events that occur that are not business transactions. Please give us an example of a business transaction that affects the accounting equation. Remember that the expanded accounting equation is: Assets = Liabilities + Owner's Equity + Revenue - Expenses. Please be sure that you provide this transaction in General Journal format. Additionally give us an example of an event that is not an accounting transaction.

Expert Solution

Accounting Equation
Examples of Accounting Transactions
	Assets=		Liabilities+	Owner's Equity+		Revenue-	Expense
Transaction	Cash+	Accounts receivable=	Accounts payables+	Common Stock+	Retained earnings+
Issue of shares for cash	$ 50,000.00			$ 50,000.00			$ -
Provided service for cash	$ 1,540.00					$ 1,540.00
Provided services on Account		$ 5,400.00				$ 5,400.00
Paid cash for Labor wages	$ (1,500.00)						$ 1,500.00

Accounting Equation
Examples of not an accounting Transactions
	Assets=		Liabilities+	Owner's Equity+		Revenue-	Expense
Transaction	Cash+	Accounts receivable=	Accounts payables+	Common Stock+	Retained earnings+
Owner purchased a house for $10000	No entry in books of accounts
Signed an agreement with manager for 1 year	No entry in books of accounts
Agreed to sell goods to a customer in next year	No entry in books of accounts
Passed a resolution to sell the company	No entry in books of accounts

Signing a contract with manager or a buyer is not an accounting transaction and neither is decisions regarding future plans of the company . Owner buying a house is not at all related to business of the company so there will be no entry in books of accounts.

Please comment in case of any query.

ekkarill92 answered 1 year ago

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