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Define an accounting transaction?

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 preetham asked almost 3 years ago

Hi, What is an accounting transaction?

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5 Answers
Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 acharya answered over 2 years ago

Purchase fixed assets from a supplier Record the depreciation of a fixed asset over time Purchase consumable supplies from a supplier Investment in another business Investment in marketable securities Engaging in a hedge to mitigate the effects of an unfavorable price change Borrow funds from a lender Issue a dividend to investors Sale of assets to a third party

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 narahari answered over 2 years ago

A sale to a customer results in an increase in accounts receivable (asset) and an increase in revenue (indirectly increases stockholders' equity). A purchase from a supplier results in an increase in expenses (indirectly decreases stockholders' equity) and a decrease in cash (asset).

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 CA Sandeep Bohra answered over 2 years ago

> Accounting Transaction --An accounting transaction is a business event having a monetary impact on the financial statements of a business. It is recorded in the accounting records of the business. --The simplest definition of an accounting transaction is an event that occurs that has an impact on your business' financial statements. This event is recorded in your business' accounting records, and keeping track of the totality of these transactions allows you to analyze and predict your business' financial health. -- Some examples of a transaction in accounting include making a sale to a customer, purchasing supplies for your business from a supplier, or borrowing money from a lender (such as taking out a loan from the bank). --Every transaction in accounting is part of the accounting equation, which can be expressed as: assets = liabilities + owner's equity. We'll define these terms below, but for now you should know that any transaction that occurs within your business—whether it be a sale you've made to a customer or a loan you've taken out from the bank—must result in a balanced equation.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 veeru answered almost 3 years ago

Let me informed that An accounting transaction is a business event having a monetary impact on the financial statements of a business. It is recorded in the accounting records of the business. Examples of accounting transactions are: Sale in cash to a customer Sale on credit to a customer Receive cash in payment of an invoice owed by a customer Purchase fixed assets from a supplier Record the depreciation of a fixed asset over time

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Open uri20170510 32134 s5bvk0?1494421637 ARJUN PRATAP SINGH answered almost 3 years ago

Dear Friend, as far as your query is concerned that Define an accounting transaction? Let me informed that An accounting transaction is a business event having a monetary impact on the financial statements of a business. It is recorded in the accounting records of the business. Examples of accounting transactions are: Sale in cash to a customer Sale on credit to a customer Receive cash in payment of an invoice owed by a customer Purchase fixed assets from a supplier Record the depreciation of a fixed asset over time Purchase consumable supplies from a supplier Investment in another business Investment in marketable securities Engaging in a hedge to mitigate the effects of an unfavorable price change Borrow funds from a lender Issue a dividend to investors Sale of assets to a third party There can also be fraudulent accounting transactions that are essentially made up by management or the accounting staff. These transactions can be avoided through the use of a comprehensive system of controls. Every accounting transaction has to follow the dictates of the accounting equation, which states that any transaction must result in assets equaling liabilities plus shareholders' equity. For example: A sale to a customer results in an increase in accounts receivable (asset) and an increase in revenue (indirectly increases stockholders' equity). A purchase from a supplier results in an increase in expenses (indirectly decreases stockholders' equity) and a decrease in cash (asset). A receipt of cash from a customer result in an increase in cash (asset) and a decrease in accounts receivable (asset). Borrowing funds from a lender results in an increase in cash (asset) and an increase in loans payable (liability). Thus, every accounting transaction results in a balanced accounting equation. Accounting transactions are either directly or indirectly recorded with a journal entry. The indirect variety is created when you use a module in the accounting software to record a transaction, and the module creates the journal entry for you. For example, the billing module in the accounting software will debit the accounts receivable account and credit the revenue account every time you create a customer invoice. If a journal entry is created directly in a manual accounting system, verify that the sum of all debits equals the sum of all credits, or the transaction will be unbalanced, which makes it impossible to create financial statements. If a journal entry is created directly in an accounting software package, the software will refuse to accept the entry unless debits equal credits. Hope answer was helpful to you Regards, Arjun Pratap Singh

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