Yes, a business can enter into a transaction in which only the left side of the accounting equation is affected. An example would be a transaction where an increase in one asset is offset by a decrease in another asset.
Can a business enter into a transaction in which only the right side of the basic accounting equation is affected?
Only one side of the accounting equation will be affected when one asset is used to acquire another asset or to replace another asset, when one liability replaces another liability, when stock is issued to replace a liability, when a cash dividend or stock dividend is declared. There are many other situations as well.
How many accounts are affected in a transaction?
Every transaction in a double-entry accounting system affects at least two accounts because at least one debit and one credit for each transaction. Usually, at least one of the accounts is a balance sheet account. Entries that are not made to a balance sheet account are made to an income or expense account.
Can a transaction affect only the left side of the accounting equation?
Yes, a business can enter into a transaction in which only the left side of the accounting equation is affected. An example would be a transaction where an increase in one asset is offset by a decrease in another asset. An increase in the equipment account which is offset by a decrease in the cash account is a specific example
Is the firing of an employee an accounting transaction?
(c) NO. An employee being fired is not an accounting transaction as it does not affect the basic accounting equation. (d) YES. Paying a cash dividend to stockholders is an accounting transaction as it does affect the
How to describe the accounting information system ( ACC )?
Describe the accounting information system. the system of collecting and processing transaction data and communicating financial information to decision makers Can a business enter into a transaction that affects the left side only of the basic accounting equation?
Is the death of a major stockholder an accounting transaction?
The death of a major stockholder of the company is not an accounting transaction as it does not affect the basic accounting equation. (b) YES. Supplies purchased on account is an accounting transaction because it affects the basic accounting equation. (c) NO.
