MGMT 1A Chapter Notes - Chapter 1.4: Retained Earnings, Accounting Equation
Document Summary
Transactions : a business"s economic events recorded by accountants. External transactions - involve economic events between the company and some. Ex. campus pizza"s purchase of cooking equipment from a supplier, payment of monthly rent to the landlord, and sale of pizzas to customers. Internal transactions - economic events that occur entirely within one company. Ex. campus pizza"s use of cooking and cleaning supplies. Companies carry on many activities that do not represent business transactions (ex. hiring employees, responding to e-mails, talking with customers, and placing merchandise orders) Some of these activities may lead to business transactions (ex. employees will earn. Company must analyze each event to find ut if it affects the components of the wages, and suppliers will deliver ordered merchandise) accounting equation. Each transaction must have a dual effect on the accounting equation for. If it does the company will record the transaction example, if asset increases, there must be a corresponding:
