what is definition of transactions??
Answers
Answer:
transaction is a completed agreement between a buyer and a seller to exchange goods, services, or financial assets.
Answer:
What Is a Transaction?
A transaction is a completed agreement between a buyer and a seller to exchange goods, services, or financial assets. But in business bookkeeping, this plain definition can get complicated. A transaction will be recorded earlier or later depending on whether the company uses accrual accounting rather than cash accounting.
The accrual accounting method requires a transaction to be recorded when it occurs, regardless of when the money is received or the expenses are paid.
The cash accounting method records a transaction only when the money is received or the expenses are paid. This may require a letter of intent or a memorandum of understanding.
Accrual accounting is used by businesses with gross receipts above $1 million a year, while the cash accounting method is used by most small businesses.
Understanding the Transaction
A sales transaction between a buyer and a seller is relatively straightforward. Person A pays person B in exchange for a product or service. When they agree on the terms, the transaction is complete.
Transactions can be more complex in the accounting world since businesses may make a deal today which won't be settled until a future date. Or, they may have revenues or expenses that are known but not yet due. Third-party transactions can also complicate the process.