Basic Accounting Transaction with EXAMPLES - shikshaglbe

An accounting transaction is an event that has a financial impact on the financial statements of a business. Examples of accounting transactions include:

Sale of goods or services

Purchase of goods or services

Receipt of cash

Payment of cash

Issuance of debt

Repayment of debt

Recognition of revenue

Recognition of expenses

Accounting transactions are the basic building blocks of financial accounting. A transaction is an economic event that has a financial impact on the company. For example, the purchase of office supplies on credit would be considered a transaction.

There are four basic types of accounting transactions:

Asset transactions: These transactions involve the acquisition or disposal of assets. Examples include the purchase of equipment and the sale of investments.

Liability transactions: These transactions involve the incurrence or repayment of liabilities. Examples include the issuance of bonds and the payment of interest on loans.

Equity transactions: These transactions involve changes in equity, such as investments by shareholders or dividends paid to shareholders.

Income and expense transactions: These transactions represent the company's revenue and expenses. Examples include sales revenue and salaries expense.

Every company, no matter how small, must keep accurate records of their finances. This process is called accounting. Accounting is the process of recording, classifying, and summarizing financial transactions to provide information that is useful in making business decisions.

There are four basic types of financial statements: balance sheets, income statements, cash flow statements, and statement of changes in equity.

The balance sheet reports a company's assets, liabilities, and equity at a specific point in time. The income statement reports a company's revenue and expenses over a period of time. The cash flow statement reports the cash inflows and outflows for a company over a period of time. The statement of changes in equity reports the changes in shareholders' equity over a period of time.

Accounting transactions are classified as either revenues or expenses. Revenues are increases in owners' equity that result from the operations of the business. Expenses are decreases in owners' equity that result from the operations of

An accounting transaction is an economic event that has a financial impact on the financial statements of a business. For example, the purchase of inventory impacts the inventory account and the cash account.

There are four basic types of accounting transactions:

1. Sales: A sale represents revenue to a company. For example, when a company sells products or services to customers, it records a sales transaction.

2. Purchases: A purchase represents an expense to a company. For example, when a company buys products or services from suppliers, it records a purchase transaction.

3. Investments: An investment represents a financial asset to a company. For example, when a company buys stocks or bonds, it records an investment transaction.

4. Financing: A financing transaction represents borrowed money to a company. For example, when a company takes out a loan from a bank, it records a financing transaction.