The key to analyzing business transactions is to look for key words in the transaction description. For example, if the transaction reads, “A check for $200 is received for services provided to a customer”, then you know that cash is increasedMoney is received and will be deposited into the bank account thus increasing the account balance. and also that revenue or income was earned causing an increase in revenueServices were provided to a customer for a fee..
Open this file Analyzing Business Transactions for a list of these key words. Then complete 2.03 Expanded Accounting Equation Spreadsheet by analyzing five business transactions into their correct debit and credit entries.
For each transaction:
- Place the dollar amount into both a debit column AND a credit column;
- Try to choose the correct account for each;
- Check to see if your total debits equal your total credits.
Formulas are already provided to total each column and to total the correct debit columns and the correct credit columns. When finished, submit your completed work to the 2.03 Expanded Accounting Equation Dropbox.