新财务英语教程 课件 Chapter 3 Basis of Accounting and Credit Transactions.pptx

Chapter 3Basis of Accounting and Credit TransactionsTopics Covered3.1 Credit Transactions Double Entry3.2 Quick Summary of This Chapter 3.1 Credit Transactions Double Entry How to account for credit transactions?Take Johnson example in the last chapter.Transaction 1:Johnson purchases goods on credit for $5,000.The accounting treatment:Dr Purchases $5,000 (to increase the “purchased goods” at cost)Cr Trade payables $5,000 (to increase the amount owed or liability to the supplier)Transaction 2:Johnson sells goods for $6,000 to customers on credit.The accounting treatment:Dr Trade receivables