Monday, May 6, 2019

Personal Finance Concepts Statement Example | Topics and Well Written Essays - 500 words

Finance Concepts - Personal instruction ExampleBased on the list above, the transactions which would contribute in an increase in the fare assets of a business are as followsBased on the list above, the transactions which would result in an increase in the primitive assets of a business are as follows Transaction 1 A company receives a cash investment from the owner. When a company receives an additional infusion of cash from the owner, the score asset specifically the asset beak is increased. This is accompanied by a corresponding augmentation in the stockholders or owners equity. Transaction 4 A company leveragings machinery for a plant and signs a promissory note in payment. This transaction will result in an increase in total assets due to the increase in the property, plant, and equipment (PP&E) account. In this regard, the companys liability will too increase due to the issuance of the promissory note which is tantamount to a promise to pay a specified amount at the s tipulated price (Meigs & Meigs, 1986). Transaction 8 A company borrows money from a bank.Similar to the initial transaction, the companys total assets particularly the asset account increases as it receives the money loaned from the bank. With this transaction, the companys total liability also increases since an obligation to pay the bank loan arises. Note that the other transactions do not result in an increase in total assets due to the reasons summarized as follows When a company makes the cash purchase for a building, there is no movement in total assets because the amount in cash account is just transferred to another asset account which is building or PP&E account.

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.