businesstransaction
A business transaction is an event that affects the financial position of a business and can be recorded in its accounting records. These events are crucial for understanding a company's financial health and performance. A business transaction typically involves the exchange of goods or services for money or other assets. Examples include selling a product to a customer, purchasing inventory from a supplier, paying employee salaries, or taking out a loan from a bank. Each transaction has a dual effect on the business's accounting equation, which is Assets = Liabilities + Equity. For instance, when a business sells a product for cash, its assets (cash) increase, and its assets (inventory) decrease, or its equity increases if it was a sale of services.
The recording of business transactions is fundamental to accounting. This process involves identifying, measuring, and recording