Livestock Economics, Marketing and Business Management

BUSINESS TRANSACTIONS

• A business transaction is an economic event that has some effects on the resources of a firm or on the sources of a firm’s assets.
• These economic events are important and therefore must be recorded and reported to decision makers.
• The following list summarises the business transactions that a firm might have.
• Observe the cycle of business operations reflected in these transactions.
  • A firm acquires assets from its owners.
  • The firm acquires assets from creditors.
  • The firm invests resources in buying assets needed to produce goods or services
  • The firm uses the resources to produce goods or services.
  • The firm sells the goods or services produced.
  • The firm returns assets to the creditors.
  • The firm returns assets to the owner’s.