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In this video tutorial, the presenter explains how to do transaction analysis using Excel. They mention that the same can be done using Google Sheets or on paper. The setup includes accounts for assets, liabilities, and equity. Accounts such as cash, accounts receivable, and computer equipment are considered assets, while accounts payable and notes payable are liabilities. Common stock and retained earnings are for equity. A running total for each account is included at the bottom to ensure balance in the balance sheet.