Test your knowledge of transaction analysis by answering the 10 short questions given below. We strongly recommend attempting to answer each question yourself before revealing the answers. If you find any of these questions challenging, check out our article on transaction analysis to learn more and fill the gaps in your knowledge.
1.
What are the two main approaches for classifying accounts?
2.
What types of accounts exist under the traditional classification (or British approach)?
3.
What are real accounts?
4.
What are nominal accounts?
5.
What are personal accounts?
6.
What types of accounts exist under the accounting equation approach (also known as the modern or the American approach)?
7.
What does it mean to debit or credit an account?
8.
What does the analysis of business transactions mean?
9.
Mr. Jones invests $50,000 in cash in his business. How would you analyze this transaction? For example, what accounts are involved in the transaction?
10.
Mrs. Riva pays $950 in cash to a creditor and receives a cash discount amounting to $50. How many accounts are involved in this transaction?
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Transaction Analysis Q&A FAQs
Transaction Analysis accounting, also known as business analysis accounting, is the process of analyzing a company's financial transactions to understand how the company is performing financially.
Some of the benefits of using Transaction Analysis accounting include improved decision-making ability, understanding how a company is performing financially, seeing where money is being spent and earned, easier to identify potential problems and solutions, improve Cash Flow.
Transaction Analysis accounting can help improve Cash Flow by helping businesses understand where money is being spent and earned. This information can help businesses make more informed decisions about how to manage their finances and improve their Cash Flow.
Some of the potential problems that can be identified through Transaction Analysis accounting include incorrectly recording financial transactions, not understanding how a business works financially, failing to track financial trends, not budgeting properly, making poor financial decisions.
A thorough Transaction Analysis can help put your company in a sellable position and maximize its value.
True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.
True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.
To learn more about True, visit his personal website or view his author profiles on Amazon, Nasdaq and Forbes.
