Chapter 2 begins the discussion of how the accounting function collects data about business transactions and processes the data to provide periodic financial statements.
Emphasis is placed on transactions which affect only the balance sheet.
At first, you might want to approach this chapter by trying to memorize the recording of the business transactions that are presented. If you adopt this approach, you may encounter transactions in homework assignments or on an exam that differ somewhat from the ones that you have memorized, and you probably will not know how to record these transaction. You will be much more successful in this course if you try to understand the process itself. Use the transaction analysis concept that is introduced in this chapter to determine how a transaction affects the entity in terms of the accounting equation. As you analyze a transaction, carefully complete each step in the transaction analysis process.