Question

Show two effects of following transaction
Goods purchased

Answer 1

Answer:

In accounting, the events that affect the finances of a business must be recorded on the books, and an accounting transaction will be recorded differently if the company uses accrual accounting rather than cash accounting. Accrual accounting records transactions when revenues or expenses are realized or incurred, while cash accounting records transactions when the business actually spends or receives money. It may require a letter of intent or memorandum of understanding.