Examples
Sale of Merchandise
Buying and Selling Merchandise on Tradeable
-
sale of merchandise for 15 (later)
- PL: sales +15
- BS: cash +15, retained earnings +15
- CF: operating +15
-
bought for 10 (payable)
- PL: cops -10
- BS: payable (liab.) +10, retained earnings -10
- CF: operating 0
Balance Sheet Sum +15 on both sides
Paying back Trade Payable
- PL: nothing (already booked in the past)
- BS: cash -10, payable (liab.) -10 → cancels out
- CF: operating -10
Balance Sheet Sum -10 on both sides