Question

Give an example of a transaction which has effect on two item on the asset side.

Answer 1

Accounting Equation

Assets = Capital + liabilities

Example for accounting transaction which has effect on two item on asset side are

1) Purchases of goods for cash

Increase in Stock (asset ) and

Decrease in cash ( Asset)

2) Purchases of fixed asset ( like building  , plant and machinery , furniture)

Increase in asset ( like building ,  plant and machinery , furniture)

Decrease in cash (asset)

3) Sales of goods for cash

Increase in cash (asset)  and

decrease in stock (stock )