Principles of Accounting
Practice Session #1
Analyzing Transactions
By Laurie L. Swanson
Analyzing a Transaction
Recall the three questions you should ask
when analyzing transactions.
1. What accounts are involved in the transaction?
2. What is the classification of each account?
3. What is happening to each account—is it
increasing or decreasing?
Analyzing a Transaction
Remember also that most transactions
contain clues that help you identify the
accounts involved in the transaction.
Further recall that each transaction will
involve at least two different accounts.
Transaction Analysis Sheet
Use the Transaction Analysis Sheet to help you
analyze the following transactions. Do not
worry at this time about the order of your
answers on the Transaction Analysis Sheet.
These transactions continue to use Jones Career
Consulting.
Be sure to view this presentation as a Slide Show
for the interaction to work properly.
Transaction Analysis Sheet
1. Provided $250 in services for a customer
on account.
What Accounts? What Classification? What Effect?
1. Accounts Receivable
Consulting Income
Asset
Increasing
Revenue
Increasing
Transaction Analysis Sheet
2. Paid employees salaries totaling $3,000.
What Accounts? What Classification? What Effect?
2. Salaries Expense
Cash
Expense
Increasing
Asset
Decreasing
Transaction Analysis Sheet
3. Purchased office equipment on account,
$1,200.
What Accounts? What Classification? What Effect?
3. Office Equipment
Accounts Payable
Asset
Increasing
Liability
Increasing
Transaction Analysis Sheet
4. Received payment from a customer for
services previously rendered.
What Accounts? What Classification? What Effect?
4. Cash
Asset
Accounts Receivable Asset
Increasing
Decreasing
Transaction Analysis Sheet
5. Karen Jones, the owner, withdrew $1,000
for personal use.
What Accounts? What Classification? What Effect?
5. Cash
Karen Jones, Drawing
Asset
Decreasing
Owner’s Equity
Increasing
Transaction Analysis Sheet
6. Paid $350 for advertising.
What Accounts? What Classification? What Effect?
6. Cash
Asset
Advertising Expense Expense
Decreasing
Increasing
Transaction Analysis Sheet
7. Performed $225 in services for a customer
who paid cash.
What Accounts? What Classification? What Effect?
7. Cash
Consulting Income
Asset
Increasing
Revenue
Increasing
Transaction Analysis Sheet
8. Karen placed a personal computer with a
market value of $800 into service for her
business.
What Accounts? What Classification? What Effect?
8. Computer
Asset
Karen Jones, Capital Owner’s Equity
Increasing
Increasing
Transaction Analysis Sheet
9. Paid the $1,200 owed for previously
purchased office equipment.
What Accounts? What Classification? What Effect?
9. Accounts Payable
Cash
Liability
Decreasing
Asset
Decreasing
This Concludes
Practice Session #1
Analyzing Transactions