Text Ch.2 #2 Which of the following statements describe tranasactions that would be recorded in an accounting system? 1) An exchange of an asset for a promise to pay 2) An exchange of a promiste for another promiswe 3) Both of the above 4) None of the above?

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Financial Transaction Analysis

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business, at least two accounts should be affected I.e. both the debit side and the credit side should be equal. The Accounting Equation is