In everyday business activities, there are events and conditions that led to the recording of transactions or data into the books of accounts. This event may be a result of an exchange of physical items. It might be the exchange of money for a particular service done by the entity.
What are business transactions?
Business transactions are activities, events, and conditions that took place within a firm.
It can also be defined as any monetary activity that occurs in a business.
Explanations of business transactions
Business transactions are events and conditions that occur within an entity. It is not necessary to be of monetary value.
However, the second definition points out that for such activities to be termed business transactions, it must have a monetary value attached to it.
For example, the sale of goods to Tega on credit for 5000 Naira is a business transaction. This transaction is in monetary term, therefore, it is a business transaction.
However, the first definition is all-embracing. It points out other information you can find in that simple activity. The part of the activities that do not involve money.
That is the customer name “Tega”. This qualitative part is important. Why? Tega bought the goods on credit. He or she must pay his debt in a future time. To remember who owes the business money, such a name must be recorded. And it is a non-money value.
In summary, business transactions monetary and non-monetary events and conditions that present themselves in an entity.
Next, the types of business transactions will be discussed.