TRANSACTION

DEFINATION:-
Any dealing or economic activities which take place between two persons
or things in which transfer of money or money’s worth takes place is called
TRANSACTION.

MONEY:-
Anything which is used as medium of exchange is called Money.

MONEY’S WORTH:-
Thing which can buy with the money. Money worth contains goods
or services.

EXAMPLE:-
XYZ: 1. Purchased goods (Merchandise from ABC Rs. 5000)
2. Deposit Rs. 2000 in MCB.

TRANSACTION
───┴───
↓ ↓
Internal Transaction External Transaction

Parties which may be involved in a transactions.

FIRST PARTY:-
Business Entity (Fresh Food Restaurant)

SECOND PARTY:-
Owner (Junaid)

THIRD PARTY:-
All other persons except first and second party. (Customers, Suppliers,
Employees, Bankers, etc.)

INTERNAL TRANSACTION:-
Any transaction in which first party involved and no other
person outside the firm is called Internal Transaction.

EXTERNAL TRANSACTION:-
 Any transaction which take place between first party and
second party or in first party and second party known as external transactions.

EXAMPLE:-

JUNAID FRESH FOOD

↓ ↓
Owner Business entity
Invest Rs. 100000 by OWNER
Profit Rs. 20000 by Business Entity.
Drawings Rs. 10000 by Owner.

EMPLOYERS SALARY given.

(Employers salary transaction between first and third party.)

Posted By ADIL, A
07/11/2007