Record of business transaction

Business transactions

Business transaction: refers to movement of money or money's worth from one person to another or from one part to another.

Money's worth: means anything of money value i.e. anything which can be bought or sold like soda, house, sugar, shoes etc.

For something to be a transaction there must be at least movement of either money, goods or service from one part to another.

Example of business transactions are:

1. Business bought goods and pay cash Tshs.9,000/=

   The above statement is a transaction because it carries movement of money from the business to the supplier of goods and movement of goods from the supplier to the business.

2. Business paid cash Tshs. 500 for transport.

   The above statement is a transaction because it carries movements of money from the business to the transporter and movement of service from the transporter to the business.

NB: Not necessary for a single transaction to have two movements at one time. Single transaction can have movement of money and goods or money and service, money only, goods only or service only.

The following three important points must be kept in mind about transactions:

1. There must be two parties to a transaction.
2. It is an exchange (or single transfer) of money or money's worth or its equivalent i.e. goods, service, debt etc. and
3. It means giving of (or agreeing to give) some benefit by one party and on the other hand, receiving (or agreeing to receive) equal benefit by other part.

Resources in business	Resources supplied by the owner

Assets	Capital