IndigoLearn

Forums

Basic terminology of accounting

A machinery is purchased on 31rst march(end of accounting year.Whether is it considered as a transaction or an event? Many does answer it as an event.!


krithika balu

krithika balu

CA Foundation

0

05-Sep-20

73

Answers (4)

Best Answer

Its both an event and a transaction.


Suraj Lakhotia

Suraj Lakhotia

Admin

05-Sep-20

Why sir?Could u explain the reason?


Thread Starter

krithika balu

krithika balu

CA Foundation

0

05-Sep-20

Thread Starter

krithika balu

Why sir?Could u explain the reason?

Purchase of machinery can be expressed in terms of money and brings change in financial position of business entity As fixed assets(machinery) increases and current assets (cash) decreases. So it can be called as transaction. All the items which are shown in the balance sheet are events on balance sheet date which are results of the transaction incurred previously. For example machinery purchased is a transaction when incurred but the closing balance of machinery on balance sheet date is an event. Similarly closing stock arises from purchases net goods sold is arrived by physical count on balance sheet date is an event.


VIJAYA SARADHI MAGANTI

VIJAYA SARADHI MAGANTI

CA Inter

850

05-Sep-20

The machinery which is purchased is a transaction as well as an event.


Abhi Abhista

Abhi Abhista

CA Inter

3K+

11-Sep-20

All the Best
Flash Sale Byte size
Past_Exams
EMI
Tally + Excel Free
Inter Testimonials
Testimonials CA Foundation July 21
Refer
Quote
Excel Launch
Study Planner
Fundamentals of Blockchain
Financial Modelling