FINANCIAL ACCOUNTING

&
REPORTING
(Fundamentals)

ZEUS VERNON B. MILLAN

Chapter 6: Business Transcations & Their
Analysis (FAR by: Millan)
 Chapter 6
Business Transactions & Their Analysis
Learning Objectives
1. Describe the nature and give examples of
business transactions.
2. Identify the different types of business
documents.
3. Analyze common business transactions using
the rules of debit and credit.
Chapter 6: Business Transcations & Their
Analysis (FAR by: Millan)
 Steps in the Accounting cycle

1. Identifying and analyzing

2. Journalizing
3. Posting
4. Unadjusted trial balance
5. Adjusting entries
6. Adjusted trial balance (and/or Worksheet)
7. Financial statements
8. Closing entries
9. Post-closing trial balance
10. Reversing entries
Chapter 6: Business Transcations & Their Analysis (FAR by: Millan)
 Identifying and analyzing transactions and events

• Only accountable events are recorded.

Accountable events are those that affect the
assets, liabilities, equity, income or expenses
of the business.
• Accountable events are normally identified
from source documents, such as sales
invoice, official receipts, delivery receipts,
and the like.
Chapter 6: Business Transcations & Their Analysis (FAR by: Millan)
 Types of Events
1. External events – are transactions that
involve the business and another external
party.
2. Internal events – are events that do not
involve an external party.

Chapter 6: Business Transcations & Their Analysis (FAR by: Millan)

 Journalizing
Journalizing refers to recording an identified
accountable event in the journal by means of a
journal entry.

Chapter 6: Business Transcations & Their Analysis (FAR by: Millan)

 Simple and Compound journal entries
• Simple journal entry – contains a single debit
and a single credit element.
• Compound journal entry – contains two or
more debits or credits.

Chapter 6: Business Transcations & Their Analysis (FAR by: Millan)

 APPLICATION OF CONCEPTS
 

PROBLEM 2: FOR CLASSROOM DISCUSSION

Chapter 6: Business Transcations & Their Analysis (FAR by: Millan)

OPEN FORUM
QUESTIONS????
REACTIONS!!!!!

Chapter 6: Business Transcations & Their

Analysis (FAR by: Millan)
END

Chapter 6: Business Transcations & Their

Analysis (FAR by: Millan)