Answer to Question #238678 in Management for Gundo

Question

Describe five types of business transactions with external parties and another five types of

business transactions from internal sources of a selected form of business company at your

nearby (please indicate the form of company you selected on the answer sheet) and explain

how they are journalized and then reported in the financial statements.

Answer 1

Form of Company: Manufacturing company

five types of business transactions with external parties

1. Purchasing materials, this involves buying materials such hardware materials from suppliers

2. Purchasing  services such as internet service and utilities

3. Purchase of assets such as machinery for expansion

4. Paying taxes to the government

5. Paying loan to the bank

five types of business transactions from internal sources

1. Paying salary to employees

2. Sales, this involves selling products to customers

3. Movement cash from the organization’s income to the bank

4. transfer of stock from one organizational department to another

5. Amortization of prepaid expanses’

 These transactions can be journalized by determining the affected accounts, translate the changes into credit and debit accounts, and indicating the date, description d reference number. Then the summarized transactions are reported using financial statement reports such as income statement, balance sheet, and cash flow statement.