A form of property is received in exchange for money parted with

A form of property is received in exchange for money parted with

Illustrative example:

On June 3, 20x2, AAA Trucking Services Company bought for P890,000.00 cash a Toyota Innova to be used as company service vehicle.

Analysis and Explanation:

Note: when analyzing a business transaction, the bookkeeper or analyst must look at the side or perspective of the company.   

Analysis:

• The value received by the company: Toyota Innova 

• The value parted with by the company:  Cash or Money

Explanation:

The value received by AAA Company is a form of property which is a thing of value - the Toyota Innova. In exchange of the Toyota Innova, AAA Company parted with another form of property which is also a thing of value - the money.

Therefore, in this transaction, the value received is the Toyota Innova and the value parted with is the cash or money.


Click here to see the recording and accounting of the above transaction