Personal Finance Concepts Statement Example | Topics and Well Written Essays - 500 words

Finance Concepts - Personal Statement Example Based on the list above, the transactions which would result in an increase in the total assets of a business are as follows:Based on the list above, the transactions which would result in an increase in the total assets of a business are as follows:ïÆ'Ëœ Transaction #1 – A company receives a cash investment from the owner. When a company receives an additional infusion of cash from the owner, the total asset specifically the asset account is increased.   This is accompanied by a corresponding augmentation in the stockholders’ or owners’ equity. Transaction #4 – A company purchases machinery for a plant and signs a promissory note in payment. This transaction will result in an increase in total assets due to the increase in the property, plant, and equipment (PP&E) account.   In this regard, the company’s liability will also increase due to the issuance of the promissory note which is tantamount to a promise to pay a specified amount at the sti pulated terms (Meigs & Meigs, 1986). Transaction #8 – A company borrows money from a bank.Similar to the initial transaction, the company’s total assets particularly the asset account increases as it receives the money loaned from the bank.   With this transaction, the company’s total liability also increases since an obligation to pay the bank loan arises. Note that the other transactions do not result in an increase in total assets due to the reasons summarized as follows: When a company makes the cash purchase for a building, there is no movement in total assets because the amount in cash account is just transferred to another asset account which is building or PP&E account.