The business transaction is the event that changes financial position of the business.
A business transaction has the following features:
- It is measurable in terms of money.
- It changes the financial position of the business.
- It has dual aspects.
- It must be an event – visible or invisible.
- It should be independent and complete.
- It may be historical or future natured.
- It has documentary evidence.
- It may be cash basis or accrual basis.
Examples: The followings are the examples of business transactions:
- Invested $50000 in the business by the owner.
- Purchased goods for $20000 cash.
- Sold goods for $25000 cash.
Gist Words: In short, the economic events are called business transactions.