Tag: qualitative characteristics, objectives and roles of accounting

Credit transaction means any transaction by the terms of which the repayment of money loaned  or loan commitment made or payment for goods, services or properties sold or leased is to be made at future date or dates. In other words  credit transaction means goods or services are purchased but the payment will settle in a later date. 

A event involving some value between two or more entities. It can be purchase of goods, receipt of money, payment to a creditor, incurring expenses, etc. A transaction is a business event that has a monetary impact on entity's financial statements, and is recorded as an entry in its accounting  records. A high-volume transaction, such as billing to a customer, may be recorded in a specialized journal, which is then summarized and posted to the general ledger. Alternatively, lower-volume transactions are posted directly to the general ledger. A transaction can be a cash transaction or a credit transaction.

The term "transaction" refers to any business dealing or event which has a value measurable in terms of money and which involves transfer of money or money's worth  between the business and others. The capital introduced by the proprietor, the amount withdrawn by the proprietor, purchase of goods on cash or credit, selling of goods for cash or credit, receipt of money from a debtor, payment to a creditor, borrowing of loan from the bank or payment of a loan, payment of salaries, rent, telephone charges, and receipt of incomes such as discount, rent and interest are examples of transactions. Cash transactions refer to any transaction which involves immediate payment or receipt of cash, e.g. purchase of goods for cash, sale of goods for cash, and payment of expenses or receipt of incomes

Business goodwill is a key intangible asset that represents the portion of the business value that cannot be attributed to other business assets. The value of a company brand name, solid customer relations, good employee relations represent goodwill. 

Every organization surely want to analyse the overall business performance. Normally this is 12 month or a period of a year. This year is called accounting year, also termed as financial year.

A transaction is an agreement between a buyer and a seller to exchange goods, services or financial instruments. Transaction is a business event that has a monetary impact on an entity 's financial statements. For example - paying a supplier for services rendered or for supply of goods, paying an employee for hours work  etc.  This all are transactions and involve money and money' s worth. 

The above statement is true as barter system is a system of exchange where goods or services are directly exchanged for other goods or services without using a medium of exchange such as money. 

In credit transaction goods or services are purchased but the payment is settle in a later date and in cash transactions payment is settled immediately. 

A brief about the journal entry is written after every journal entry to give the transaction details about the journal entry. 

Every economic activity is performed through transactions and events. An event is the happening, consequence or result of the transaction. Hence in our example the surplus profit is an event which is result of transaction.