Q. Illsutarte the Summary of transactions?
Summary of transactions is a teaching tool utilized to show the effects of transactions on the accounting equation. Note that the stockholders' equity has stay at USD 30000. This amount changes as the business starts to earn revenues or incur expenses. You are able to see how the totals at the bottom of Part A of Exhibit 3 tie into the balance sheet shown in Part B. The date mentioned on the balance sheet is 2010 June 30. These totals grow to be the beginning balances for July 2010.
Therefore far all transactions have consisted of acquisitions or exchanges of assets either by borrowing or by owner investment. We utilize this procedure to help you focus on the accounting equation as it relates to the balance sheet. But people don't form a business only to hold existing assets. They form businesses thus their assets can generate greater amounts of assets. Therefore a business increases its assets by providing goods or services to customers. The effect of these activities appears in the income statement. The section that follows demonstrates more of Metro's transactions as it began earning revenues and incurring expenses.