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The steps of the transaction analysis

Accountants record transactions and other events on the basis of source

documents (in Romanian “documente primare”), such as sale invoices, checks,
receipts, bills, payrolls, bank statements etc. Source documents are very important as
they grant objectivity and verifiability to accounting information. Every transaction
(or event) shall be assessed and analysed, following the subsequent steps presented.
Transaction 1: On January 1st, 20X4 John and Peter founded Happiness S.R.L., each
contributing with 2,500 lei in cash. The newly established company will buy and resell IT
accessories.
 The purchase of music equipment
(A+x)=E+(L+x)
Increase in asset (Inventory)
Increase in liabilities(acc payable)

The debit side

Credit side

Inventory 14 000 lei = Accounts payable 14 000

lei

D Inventory C D Account payables C

14 000 lei 14 000 lei

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 Receiving money
A+x = E+ (L-x)

Debit side

D Cash C D Liabilities C
7 000 lei 7 000 lei

Homework