Understanding Spot FX Transactions**Spot Transaction: Definition**
A spot FX transaction is a purchase or sale of one currency for an...
Lessons
- Introduction to Accounting Skills for Managers
- Key Accounting Concepts
- Accounting Business Transactions and the Accounting Equation
- Accounting Skills - Case Study
- Rules of Debit and Credit
- Maintaining Accounting Records
- Cheat Sheet - Accounting for Common Business Transactions
- Accounting Case Study - Journal Entries
- Accounting Case Study - General Ledger and Trial Balance
Cheat Sheet - Accounting for Common Business Transactions
While a business conducts a variety of transactions on a daily basis, there are a few transactions that you will come across quite often. This cheat sheet provides a list of such common transactions in a business along with their accounting treatment.
| Transaction | Account 1 (Dr.) | Account 2 (Cr.) |
| Receiving advance from the client | Asset – Cash | Liability – Unearned Revenue |
| Raising invoice to the client | Asset – Accounts Receivable | Income (Increase in Capital) |
| Buying assets on cash | Asset (Specific category) | Asset – Cash |
| Receiving a bill (a bill due) | Expense (Specific category) | Liability – Accounts Payable |
| Paying the bill | Liability – Accounts Payable | Asset – Cash (If paid by cash) Asset – Checking A/c (If paid by check) |
| Buying office supplies | Expense (Specific category) | Asset – Cash (If paid by cash) Asset – Checking A/c (If paid by check) |
| Receiving payment from the client | Asset – Cash (If cash received) Asset – Checking A/c (If check received) | Asset – Accounts Receivable |
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