Basic terminology of accounting

Its both an event and a transaction.

CA Suraj Lakhotia

Admin

05-Sep-20 12:12

Why sir?Could u explain the reason?

Thread Starter

krithika balu

CA Foundation

★ 0

05-Sep-20 12:32

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

CA Inter

★ 850

05-Sep-20 14:46

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

Abhi Abhista

CA Inter

★ 3K+

11-Sep-20 20:36