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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