accounting problem i need help with it

timer Asked: Mar 18th, 2015

Question description

The ABC Inc. company began operations on January 1 of the current year. It performed several business activities during the month of January. Its two partners contributed $20,000 each, in cash, in order to start operations. They established a contractual agreement with a supplier who guaranteed them a 30% discount in exchange for annual $30,000 inventory purchases. They bought office equipment worth $5,000 and office supplies at a cost of $2,000. For these purchases, they used the owner-deposited funds, which are kept at the National Bank. They established an accounting services contract with JW Consultants so that they keep their business's accounting ledgers for $300 a month.  Is each one of the aforementioned business activities a transaction that must be recorded in the accounting ledgers? Substantiate your answer by considering the definition and the components of an accounting transaction.

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