BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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True
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False
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Detailed explanation-1: -Accounting transaction analysis involves documenting every transaction that has an impact on your company’s finances. This recordkeeping step is very important in the accounting process and helps to show how your business transactions impact your assets, liabilities, and equity.
Detailed explanation-2: -The first step in analyzing a transaction is to determine what accounts are involved. Partners are personally liable for the liabilities of the partnership if the partnership is unable to pay.
Detailed explanation-3: -The accounting equation (Assets = Liabilities + Owner’s Equity) must remain in balance after every transaction is recorded, so accountants must analyze each transaction to determine how it affects owner’s equity and the different types of assets and liabilities before recording the transaction.