Transaction Analysis With Journal Entries Explanations - Effects of Transactions On The Accounting Equation
Without knowing that how to make transaction analysis, no one can record the transaction in the Journal , so it is the basic of recording a transaction. Here, we discuss some of the most important transactions of the business that take place in every business’s life which have effects on the Accounting Equation (Assets = Lia bilities + Equity). If you do not know about Transaction then, Please Read this Article about What is a Transaction Before maki ng transaction analysis and its effects on the accounting equation, we must take into account following three important points to know: 1. Assets affect the asset side of Accounting Equation. 2. Liabilities & Capital or Equity affects the Liabilities & Equity side. 3. Revenues & Expenses also affect the Liabilities & Equity side of accounting equation as these are the results of profitable activities of the owners of the business so revenues are added to...