![]() Therefore, it can change the fundamental accounting equation and can be expressed monetarily. Whenever there is an increase or decrease in the company’s assets or liabilities, an accounting event takes place. In an accounting sense, an event can be understood as the final outcome of a business activity, that can affect the account balances of the company if it is financial in nature. In simple terms, an event may be described as any incidence, that occurs as a result of something. There are two types of accounting transactions, given as under: ![]() The occurrence of a business transaction is on a regular basis, which includes purchasing or selling of goods, receipt of money from debtors, payment to creditors, extending or borrowing money, generating income or incurring expenses. When all the business transactions are tracked properly, it helps in analysing the financial soundness of the business. ![]() These are recorded in the books of account, with a journal entry. It may result in lt in the movement of value from one person to another. Any event which has some monetary impact on the financial statement of the business is called as a transaction. The term financial transaction is viewed as a business dealing, which involves the exchange of goods or services for value between two or more parties, firms or account. May or may not result in change in financial position of the company. Results in change in the financial position of the company. Only those events are recorded which are financial in nature. Transactions are those business undertaking, that have a direct or indirect impact on the finances of the company.Īn event alludes to the occurence of consequence to a business organization, due to a transaction that can be expressed in monetary terms. To understand the meaning of accounting completely, one should know the difference between transaction and event, as the entire discipline is based on it. On the other hand, event alludes to the final outcome of the business transaction. The term transaction can be understood as the business deal of buying and selling something for adequate consideration, carried out between two or more persons or entities.
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