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Homework answers / question archive / In accounting, it is important to understand that there may be events that occur that are not business transactions

In accounting, it is important to understand that there may be events that occur that are not business transactions

Accounting

In accounting, it is important to understand that there may be events that occur that are not business transactions.

a. Give an example of a business transaction that affects the accounting equation. Provide the transaction in General Journal format.

b. Give an example of an event that is not an accounting transaction.

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a. Give an example of a business transaction that affects the accounting equation. Provide the transaction in General Journal format.

A business transaction that can be categorized as an accounting event is "The company incurred and paid salaries of the accounting personnel amounting to 30,000.". The entry for this transaction would be:

Salaries Expense 30,000  
Cash   30,000
To record the payment of salaries.

b. Give an example of an event that is not an accounting transaction.

The company contracted and agreed to the service provider that the janitorial and security services will be outsourced from them.

Since the transaction has not yet commenced and amounts are not yet incurred and paid, no transaction shall be recorded.

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