1 / 6

BAF3M Accounting

BAF3M Accounting. Chapter 3 –Analyzing Changes in Financial Position. 3.1 Business Transactions. Many events occur every day that change a business’s financial position Businesses buy assets, assume more liabilities and also collect revenues and pay expenses All of these things are called

marzano
Download Presentation

BAF3M Accounting

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. BAF3M Accounting Chapter 3 –Analyzing Changes in Financial Position

  2. 3.1 Business Transactions • Many events occur every day that change a business’s financial position • Businesses buy assets, assume more liabilities and also collect revenues and pay expenses • All of these things are called “Business Transactions”

  3. 3.1 Business Transactions • Source Documents • Name given to documents that verify the amount of a business transaction (ie receipt, invoice) • Accounting entries are made based on source documents • Source documents are filed for future reference • Accounting Standards – Objectivity Principle • 3.1 Ex’s #1, 2

  4. 3.2 Equation Analysis Sheet • Next step is to see how various business transactions affect and change financial position • Example on overhead pg 61-67, see the effect that 7 transactions have on the balance sheet for METROPOLITAN MOVERS

  5. 3.3 Summary of Steps in Analyzing a Transaction • Step by Step 1 – Identify all items (A and L) that must be changed and make all necessary changes 2 – see if OE has changed 3 – Make certain that at least 2 of the individual items have changed 4 – Make sure the equation is still in balance

  6. 3.3 Exercises Pg 69 #1, 2

More Related