Use of property, or hire of services, of another person is parted with in exchange for money received.

Use of property, or hire of services, of another person is parted with in exchange for money received

Illustrative example for use or hire of property (owned by the company):

AAA Company received cash, P4,500.00, from a customer for the use of its delivery truck. 

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: money

• The value parted with by the company:  use or hire of the company property

Explanation:

The value received by AAA Company is the money.  In exchange, AAA Co. parted with is the use or hire of the its property.

Therefore, in this transaction, the value received is the money and the value parted with is the use or hire of the delivery truck by another entity or person.


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

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Illustrative example for use or hire of services:

AAA Company received cash, P2,000.00, for the driving services rendered to a customer. 

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: money

• The value parted with by the company: driving services

Explanation:

The value received by AAA Company is the money.  In exchange, AAA Co. parted with is the company's driving services.

Therefore, in this transaction, the value received is the money and the value parted with is the driving services of the company.


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