[Solved] Transaction Analysis Example in Accounting

 Welcome back to all accounting students today we are going to solve transaction analysis examples in accounting so if you are a B.com student or learning about financial accounting then transaction analysis is the first topic that you should understand properly.

Now let's start our transaction analysis example

 analyzing transactions example

Example: A Simple Transaction Analysis

Suppose you have a small business called "ABC Electronics." Here's a typical transaction for your business:

Transaction 1: On January 1, 2023, ABC Electronics invested 10,000 rupees of its owner's personal savings into the business bank account to start operations.

Now, let's break down this transaction into its fundamental components:

Date of Transaction: January 1, 2023

Entities Involved:

• ABC Electronics (the business)

• The business owner (the owner's personal savings)

• Nature of Transaction: The owner is investing personal savings into the business to provide initial capital.

Analysis of Accounts Affected:

• Cash/Bank Account: Increases by 10,000

• Owner's Equity (Capital): Increases by 10,000

Financial Effect:

• The business now has $10,000 in its bank account.

• The owner's equity in the business has increased by 10,000.

Double-Entry Accounting:

• Debit: Cash/Bank Account (+10,000)

• Credit: Owner's Equity (Capital) (+10,000)

In this example, the accounting equation remains in balance:

Assets (Cash) = Owner's Equity

10,000 = 10,000

Conclusion

Here in this post, we add a solved analysis of a transaction example so if you want to understand the analysis of the transaction then you should read this post till the end.