Start networking and exchanging professional insights

Register now or log in to join your professional community.

Follow

The amount of assets, liabilities and owner’s equity are changed by business transactions. it is true please give a explanation?

user-image
Question added by Ashika Nand
Date Posted: 2017/01/31
Salman Saeed
by Salman Saeed , Business Planning and Forecasting Manager , Emaar - Saudi Arabia

A sales transaction will increase bank/cash/receivables while decreasing inventory, on the other hand it will increase equity through profit for the year added into accumulated profits.

A loan acquired will increase bank/cash and increase the loan payable liability, this transaction will balance off the effect of increase in asset with increase in liabilities and will not effect equity.

A share issue will increase the equity and the funds generated from share issue will increase the assets.

More Questions Like This

Do you need help in adding the right keywords to your CV? Let our CV writing experts help you.