Describe a transaction and its importance to the accounting department.
What will be an ideal response?
All businesses operate using the same basic element, the transaction. A transaction is an exchange or
transfer of goods, services or funds involving two or more people. Each time a transaction occurs a source
document captures all of the key data involved with the transaction. The source document describes the
basic transaction data such as its date, purpose and amount and includes cash receipts, cancelled checks,
invoices, customer refunds, employee time sheet, etc. The source document is the beginning step in the
accounting process and serves as evidence that the transaction occurred. Financial statements are the
written records of the financial status of the business that allow interested parties to evaluate the
profitability and solvency of the business. Solvency represents the ability of the business to pay its bills
and service its debt. The financial statements are the final product of the accountant's analysis of the
business transactions. Preparing the financial statements is a major undertaking and requires a significant
amount of effort. Financial statements must be understandable, timely, relevant, fair and objective in
order to be useful. The accounting department prepares all of the financial statements.
You might also like to view...
October November December Budgeted S&A Expenses Salary expenses10,000 10,500 11,000 Sales commissions, 5% of sales5,000 5,500 5,300 Insurance expenses2,000 2,000 2,000 Rent2,400 2,400 2,400 Depreciation on equipment1,500 1,500 1,500 Utilities1,100 1,300 1,500 Total operating expenses22,000 23,200 23,700 Schedule of Cash Payments for S&A Expenses Salary Expenses? 10,500 ? 100% of prior month sales commissions5,100 ? ? Insurance Expense2,000 2,000 2,000 Rent? ? 2,400 100% of Prior months utilities expenses1,200 ? ? Total payments foe S&A expenses? ? ? What is the total amount of S&A expenses for the fourth quarter that the company will report on its pro forma income statement?
A. $64,400 B. $23,700 C. $63,900 D. $68,900
Which is the correct order of the Objective Writing model?
a. (1) action verb + (2) to + (3) specific and measurable result + (4) target date b. (1) to + (2) action verb + (3) specific and measurable result + (4) target date c. (1) to + (2) action verb + (3) target date + (4) specific and measurable result d. (1) specific and measurable result + (2) to + (3) action verb + (4) target date
A caution
A) tells the reader if an action might harm the product. B) tells the reader to read all instructions before beginning the task at hand. C) tells the reader an interesting fact about the process to watch for.
The issue in a case is also known as the question presented
a. True b. False