For example, if a company purchases office supplies and pays for them with cash, a debit card, or a check, then that is a cash transaction. They are the most common forms of transactions, which refer to those that are dealt with cash. Types of Accounting Transactions based on the Exchange of Cashīased on the exchange of cash, there are three types of accounting transactions, namely cash transactions, non-cash transactions, and credit transactions. This may include computing the salary of the employees and estimating the depreciation value of a certain asset. They don’t involve any sales but rather other processes within the organization. It is also called a business transaction.Įxample: If Company A buys raw materials for its production from Company B, then this is called an external transaction.
Therefore, it can be said that any transaction that is entered into by two persons or two organizations with one buying and the other one selling is considered an external transaction. These involve the trading of goods and services with money. The first one that we will discuss is the types of accounting transactions according to institutional relationships, namely external and internal transactions. The types of accounting transactions may be based on various points of view. Types of Accounting Transactions based on Institutional Relationship It is imperative to remember that every transaction should show the balance between the assets and the liabilities, or the debit and the credit, such that a receipt of cash from a customer equals an increase in revenue or that a purchase from a supplier equals an increase in expenses and a decrease in cash.
Purchase of fixed assets and movable assets.Receipt of cash from a customer by sending an invoice.Such transactions come in many forms, including: Updated FebruWhat are Accounting Transactions?Īccounting transactions refer to any business activity that results in a direct effect on the financial status and financial statements of the business.
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