Question: 1. Explain the difference between external transactions and internal transactions. If a company purchases supplies from a local vendor, would this be classified as an external or internal transaction?
2. List the steps we use to measure external transactions.
3. Each external transaction will have a dual effect on the company's financial position. Explain what this means.
4. Describe the impact of each of these external transactions on the accounting equation.
a. Receive a loan from the bank.
b. Pay employee salaries for the current period.
c. Receive cash from customers for services provided in the current period.
d. Purchase equipment by paying cash.