Analyzing Changes in Financial Position

Question 1

BUSINESS TRANSACTION

Answer 1

Events that cause the financial position of a business to change

Question 2

SOURCE DOCUMENT

Answer 2

It is the record of the original history of the transaction

it provides accounting personnel with the information they need to process the transaction properly

Question 3

OBJECTIVITY PRINCIPLE

Answer 3

Requires that a business’s accounting be recorded on the basis of clear, verifiable evidence

Meaning transactions will be recorded on fact, not on personal opinions or feelings

Question 4

What is the best objective evidence available?

Answer 4

THE SOURCE DOCUMENT!

Question 5

SOURCE DOCUMENT EXAMPLES

Answer 5

Telephone bills, hydro bills, store receipts.. etc

Question 6

MEMORANDUM

Answer 6

message, note, letter– regarding problems and solving problems

They are easy to understand

Question 7

EQUATION ANALYSIS SHEET

Answer 7

A tool for displaying individual transactions and the new financial changes

imply use it to teach us how the financial position of a company changes all the time and how it changes.