BASIC TRANSACTION 2

EX: 01 

Owner INVESTED $10,000 in the company.

Analysis of Transaction

Steps

Increase in Assets (cash) by $10,000                                                        DEBIT

Increase in Owner’s Equity by $10,000                                                    CREDIT

Journal Entry

	DEBIT	CREDIT
CASH	10,000
OWNER’S EQUITY		10,000

Description of Journal Entry

Owner INVESTED $10,000 in the company.

   Results of Journal Entry

Cash balance increases by $10,000.  --> Increase in Assets Owner's Equity balance increases by $10,000.  -->  Increase in Owner's Equity

EX:02

The company purchased $12,000 equipment and PAID IN CASH

Analysis of Transaction

Steps

Increase in Assets (Equipment) by $15,000                                                           DEBIT

Decrease in Assets (Cash) in by $15,000                                                               CREDIT

Journal Entry

	DEBIT	CREDIT
EQUIPMENT	15,000
CASH		10,000

   Description of Journal Entry

Purchased $12,000 equipment in cash.

   Results of Journal Entry

Equipment balance increases by $15,000.  --> Increase in Assets Cash balance decreases by $15,000.  -->  Decrease in Assets

BASIC TRANSACTION OF BUSINESS

Basic transaction of every business can be identified as follows and basic double entries saw in here. I like to say every transaction not covered in following table and hope to discuss step by step. In next post hope to solve basic example for your knowledge. Also hope to indicate important management theories for business.

REF. NO.	DESCRIPTION	DEBIT	CREDIT
01	CASH SALE	CASH BOOK	SALE ACCOUNT
02	CREDIT SALE	DEBTOR ACC.	SALE ACC.
03	CASH PURCHASE	PURCHASE ACC.	CASH BOOK
04	CREDIT PURCHASE	PURCHASE ACC.	CREDITOR ACC.
05	PAYMENT FOR EXPENSES	EXPENSE ACC.	CASH BOOK
06	PAYMENT FOR CREDITORS	CREDITOR ACC.	CASH BOOK
07	RECEIVED FROM DEBTORS	CASH BOOK	DEBTOR ACC.

INTRODUCTION TO CASH BOOK

In my first post I said money is very important factor regarding any kind of business. So, every transaction combined with money. Therefore, we should be record that transaction 100% accurately. If not we cannot verify cash inflow & outflow of the company. First of all we have to record that transaction using primary books/primary ledger. Cash book is very important primary book out of other primary books.

WHAT IS CASH BOOK??????????????

LET'S START

Hi..........

First of all I like to say I start this blog for the people who are doing the business and like to start business. You may be small producer or may be small service provider. Doesn't matter, I will hope to talk about covering every type of business.

What is business?

It can be simply defined as “provide a product or service for the customers and other hand customer give money to product or service provider”. As an above definition we can see money presented as exchange media. Therefore money important thing to the business. I will hope to discuss about history & important about money in later.

When present time in the world money is a very important for the people, because without a money can’t do anything in this business world. Everything has become a business, even water, oxygen. Theoretically we was considered these are as free goods. Everything was a sell-able item, therefore we have lot of opportunities for business. So, through this situation we can get profit doing some business. For this purpose I think businessman should be a knowledgeable person. This effort provide knowledge, some theories, and new trends to manage business in successful way. In here I indicate how to be a good business person, how to be a good entrepreneur adopting management techniques like accounting, economics, management, HR, etc.