Acct130 – dis 1

Understanding a transaction and the effects it has on the accounting equation creates the foundation for what you will see in the remainder of the course. Please develop a transaction for The Slinky Factory, a company that makes Slinky toys that flip down the stairs. If you’re not familiar with this toy, see the website (

Slinky

). The factory and equipment have been around for about 30 years.

Come up with a transaction that is relevant to this company. Don’t worry if it is generic, such as payment of a utility bill

• Make a statement explaining the transaction.
• Identify at least two accounts that will be affected by the transaction.
• Does the transaction increase the account or decrease the account?
• Would the accounting equation still balance after your transaction?

Use the following accounts for your transaction:

• Cash
• Accounts Receivable
• Inventory
• Property Plant & Equipment
• Accounts Payable
• Mortgages Payable
• Other Liability
• Revenues

Expenses