Accounting recording transactions Name

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Accounting recording transactions

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Scenario 1

Luca Pacioli book keeping principles refers to the use of double entry method to determine the difference in assets and liabilities in business transaction though determining aspects to debit and those to credit in a journal (Andruss, 1937). Through this partition in the independent occurrence of assets and liabilities, the business has the capability to establish the existence of expenses and profit acquired from deduction of expense. According to Luca Pacioli, every aspect of business transactions requires an opposite counter in recording the transaction where a double entry is culminated such that the entry of information regarding a transaction utilizes an equation that maintains balance in record keeping. In the above scenario, the manager who is obviously meticulous about his severance uses a conniving scheme to ensure that he maintains his bonus after end of the year business closure in accounts and determination of profit margin as per the financial year (Silverstone, 2012). Since the manager is in charge of deciding how the company manages records accounting transactions, he suggests that expenses of the year in question be transferred to the next year to ensure that they do not affect the business profit. Luca does not agree with the logic of this scheme in whatever context of the matter. He states, “Nobody should go to sleep until the debits equalled the credits” (Brown & Johnston, 1963). Lucas uses the concept of debit and credit as premise for maintenance of a balance sheet objective to “balance” when creating journal entries and to avoid misrepresentation of data on the ledger. Considering the above case, the accountant lack of recording the transaction but providing funds for the expense of the maintenance cost violates Lucas principle of book keeping. Considering the facts of the case on one side, the accountant will de.............


Type: Essay || Words: 647 Rating || Excellent

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