There are purchased items on the iPhone "asingh's iPhone" that have not been transferred to your iTunes library. You should transfer these items to your iTunes library before updating this iPhone. Are you sure you want to continue?

When I am trying to upgrade my iphone to IOS7.0.2 by connecting my my iphone and macbook, it shows "There are purchased items on the iPhone “asingh’s iPhone” that have not been transferred to your iTunes library. You should transfer these items to your iTunes library before updating this iPhone. Are you sure you want to continue? ".  I hit the same issue and lost a lot of apps from my iphone. Can someone help on how to resolve this issue? I can automatically upgrade my software on the iphone but how shall I resolve any future updates of "Apps"?

I appreciate the answer, but what you describe is not entirely accurate.  First, to even see view, you have to enable the menu by clicking on the icon in the upper left.  View allows you to show the sidebar.
Second, you will NOT see your devise listed in sidebar or anywhere else.  Instead, you have to click on "devise" from the sidebar menu, wait a minute, and then it will finally show up under "devise."   Or maybe it just takes a minute to show up whatever you do. 
Third, right clicking on your devise will take you to a menu with "transfer my files" on it, but then iTunes will refuse to make the transfer.  Instead, it will tell you that <your apps> on your <devise> could not be transferred to iTunes "because you are not authorized for it on your computer."  Apple unhelpfully suggests going to store> authorize this computer.  There is a "store" menu item on the sidebar, but it has no "authorize this computer" sub-menu.  Instead, go to the horizontal menu at the upper left, and THERE you will find "store" and the "authorize this computer" sub-menu.  Now you can transfer your files, to who knows where.
My iPhone 5 is my first Apple devise. So far my experience has been, to do A, which must be done right now, you must first do B.  To do B you must first do C, which is unexplained save in answers in user forums.  To do C you must first do D, which, after several hours of research and puzzle solving, can eventually be done.

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