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Give an example for each of the following types of transactions.
By BYJU'S Exam Prep
Updated on: September 25th, 2023
- Increase in one asset, decrease in another asset.
- Increase in asset, increase in liability.
- Increase in asset, increase in owner’s capital.
- Decrease in assets, decrease in liability.
- Decrease in asset, decrease in owner’s capital.
- Decrease in liabilities, increase in owner’s capital.
- Increase in one liability, decrease in another liability.
- Increase in liabilities, decrease in owner’s capital.
The examples for each of the following types of transactions are mentioned below. Any business activity that has a financial impact on a company’s financial statements is considered an accounting transaction. To maintain accuracy, it’s crucial to document each transaction.
A thorough system of controls can stop fraudulent accounting transactions from happening because management and accounting staff are capable of fabricating them. Typical accounting transactions include the following:
- Selling a product to a customer
- Buying supplies from a supplier
- Borrowing money from a lender
Table of content
Examples of Types of Transactions
Another component of an accounting transaction is an asset. An asset may yield a financial gain in the future. Assets include things like money, cars, land, equipment, etc.
(i) Purchase of furniture for cash – a rise in furniture and a decline in money.
(ii) Purchase of furniture on credit – furnishings, and creditors have both increased.
(iii) Capital Introduced by the proprietor- both growth in capital and cash.
(iv) Payment to creditors – decreases in both cash and debtors.
(v) Cash withdrawn by the proprietor- decreases in both capital and cash.
(vi) Conversion of partner’s Loan into capital- a rise in capital and a fall in debt.
(vii) Bills payable accepted – a rise in accounts payable and a fall in creditors.
(viii) Outstanding expenses provided – Increase in debt due to higher-than-expected expenses and a decline in capital
Summary:
Give an example for each of the following types of transactions.
The examples for each of the following types of transactions are mentioned above. An accounting transaction is any business activity that has a financial impact on a company’s financial statements. It’s essential to record every transaction in order to ensure accuracy.
