Scroll Top

search-icon
    drop-arrow

    Transaction

    Introduction

    In accounting, the business transaction is an occurrence which must be measured in terms of money and which ultimately affects the business' financial position. A transaction is a commercial occurrence that influences the financial statements of a company monetarily and is reported as an entry in its accounting records.

    Examples of Transactions

    • Pay for services provided or products shipped to a retailer.

    • Pay cash and a notice to a seller to obtain ownership of a property previously owned by the seller.

    • Charge for hours of work to an employee.

    • Receive payment from a customer in return for the supplied goods or services.

    A high-volume transaction may be reported in a specific document, such as billing to a client, which is then compiled and added to the general ledger. Alternatively, smaller-amount transactions are reported directly to the general ledger.

    Characteristics

    From the discussion above, we may point out the following five important characteristics of a valid business transaction. They must be taken care of by bookkeeper or accountant before entering the transaction in the log.

    • It's a monetary thing.

    • It impacts the firm's financial position.

    • This belongs to the company but not to the owner or any other person who operates the business.

    • An individual initiates it with authority.

    • It is supported by the source document.

    Types

    Most companies offer consumers a product or service to make money. It can be much more complicated than that simple model. While some companies serve as the middle man from supplier to the customer, others sell to other businesses, and some organizations don't adopt a financial model that generates profit for them. All of these business models contribute to different types of transactions.

    • Business to business
    • Wholesaler to retailer
    • Wholesaler to consumer
    • Retailer to customer
    • Consumer to consumer
    Index

    Clear offers taxation & financial solutions to individuals, businesses, organizations & chartered accountants in India. Clear serves 1.5+ Million happy customers, 20000+ CAs & tax experts & 10000+ businesses across India.

    Efiling Income Tax Returns(ITR) is made easy with Clear platform. Just upload your form 16, claim your deductions and get your acknowledgment number online. You can efile income tax return on your income from salary, house property, capital gains, business & profession and income from other sources. Further you can also file TDS returns, generate Form-16, use our Tax Calculator software, claim HRA, check refund status and generate rent receipts for Income Tax Filing.

    CAs, experts and businesses can get GST ready with Clear GST software & certification course. Our GST Software helps CAs, tax experts & business to manage returns & invoices in an easy manner. Our Goods & Services Tax course includes tutorial videos, guides and expert assistance to help you in mastering Goods and Services Tax. Clear can also help you in getting your business registered for Goods & Services Tax Law.

    Save taxes with Clear by investing in tax saving mutual funds (ELSS) online. Our experts suggest the best funds and you can get high returns by investing directly or through SIP. Download Black by ClearTax App to file returns from your mobile phone.

    Cleartax is a product by Defmacro Software Pvt. Ltd.

    Company PolicyTerms of use

    ISO

    ISO 27001

    Data Center

    SSL

    SSL Certified Site

    128-bit encryption