Step 2: Analyzing Business Transactions
After you have collected and verified the sources of documents, the next step is to analyze the transactions. You can analyze the transaction by applying the rules of debit and credit to the transaction.
While analyzing a transaction, the description of the transactions such as, ‘John Carriage Service bought a computer system from Info-system Inc. for $2,000 and issued check No. 210 as payment,’ are not given. Instead, you must examine the source document to determine what occurred during the business transaction.
