Accounting Transaction is heartbeat of every business organization. All economic activities are called transactions. Any dealing between two persons involving money or a valuable thing is called transaction. Every person cannot fulfill all his needs like food, clothing, housing etc. on his own. He, therefore, depends on other people to provide him with some of his needs.
Forms of Transactions
Translating every transaction in terms of money does not always mean that the money changes hands, the same time at which the transaction takes place. It may be paid before or after the goods are exchanged. When the money value of an item being purchased is paid, at the same time the item is exchanged. The accounting transaction is said to be a Cash Transaction. On the other hand, if the payment is delayed to a future date, the transaction is termed as a Credit Transaction.
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