Question

explain the types of transaction
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Answer 1

Explanation:

There are four main types of financial transactions that occur in a business. These four types of financial transactions are sales, purchases, receipts, and payments. ... Sales transactions are recorded in the accounting journal for the seller as a debit to cash or accounts receivable and a credit to the sales account.

Answer 2

Transaction:

Exchange of money in return for goods or services is called a transaction.

In accountancy, only those transactions are recorded which are of financial nature.

Types of Transactions:

Mainly, there are two types of transactions:

1. Cash Transactions: These include those transactions in which payment is made through money or cheque in return for goods and services.
2. Credit Transactions: These are those transactions in which the buyer of goods or services doesn't pay anything for the goods or services he consumes. In this case, he/she becomes the debtor of the seller and is ought to pay to the creditor (the seller) in future.

Examples:

1. Cash Transactions:

Mr. A has a business of selling pens for Rs. 10, which cost him Rs. 8.

Ramu comes to his shop and buys one pen for Rs. 10 and pays him Rs. 10 in cash on the spot. This is a cash transaction.

This will be recorded in the journal book of Mr. A as follows:

Cash A/c - Dr       10

    To Sales A/c            10

2. Credit Transactions:

Mr. A has a business of selling pens for Rs. 10, which cost him Rs. 8.

Raju comes to his shop, takes a pen and says that he'll pay for it sometime later.

This is a credit transaction and it be recorded in the journal book of Mr. A as follows:

Raju's A/c - Dr         10

    To Sales A/c                 10

Here, instead of cash a/c, Raju's A/c will be debited because now Raju is a debtor (an asset) of Mr. A and increase in asset is debited.

A Bonus Example:

Mr. A has a business of selling pens for Rs. 10, which cost him Rs. 8.

Mohan comes to his shop, takes a pen and pays Rs. 6 on the spot and says that he'll pay the remaining amount sometime later.

This is a cash and credit transaction and it be recorded in the journal book of Mr. A as follows:

Cash A/c - Dr             6

Mohan's A/c - Dr        4

    To Sales A/c                   10

This is because he payed Rs. 6 on the spot but he is liable to pay Rs. 4 to Mr. A in the future.