Today, we will learn the Top “25” Questions and Answers- Accounting Transactions.” If you read this article from top to bottom with a correct concentration, you will gather a basic idea of accounting transactions.
It will help you to improve your accounting knowledge and do well on any competitive test.
So let’s get started.
Questions and Answers- Accounting Transactions
Question-01: What is the Transaction?
Answer: Transactions are called events that bring a change in the financial position and are related to money. For Example,
- The Purchase of Goods $2,000,
- Payment of salary $400,
- Depreciation expenses $ 500, etc.
Question-02: What is an Event?
Answer: Event refers to a process with a specific moment and a place of occurrence, or a part of a process—for Example, Payment of gas bill $ 300, The appointment of the production manager, etc.
Question-03: How many types of events are there? And what are those?
Answer: There are two types of events which are as follows:
- Monetary Event and
- Non-Monetary Event
Question-04: What is a Monetary Event?
Answer: Monetary Events are events that are measurable in terms of money. For Example, Payment of electricity bill $300
Question-05: What is a Non-Monetary Event?
Answer: Non-monetary events are events that are not measurable in terms of money—for Example, the appointment of a manager, the death of an employee, etc.
Question-06: What are the Characteristics of the Monetary Events?
Answer: The Characteristics of the monetary events are as follows:
- Temporary nature
- Definite object
- Separate Entry & Self Sufficiency
Question-07: What are the Features of Transactions?
Answer: The features of transactions are as follows:
- Measurable in term of money
- Change of financial position
- Quantitative and Qualitative Change
- Transfer goods or service
- Visible or invisible
Question-08: What is the difference between Event and Transaction?
Answer: the difference between event and transaction is as follows:
- Each event is not a transaction, while all transactions represent events.
- All events may or may not change in the financial condition of a person, family, or organization. At the same time, all transactions must bring a financial change to a person, family, or organization.
Question-09: What’s an External Transaction?
Answer: A transaction that happens between two individuals or two organizations or between an individual and an entity in terms of money is called an external transaction. For Example, purchase a $30,000 computer from Z International.
Question-10: What’s the Internal Transaction?
Answer: transactions relating to the adjustment of depreciation of fixed assets, revenue receivable, expenditure payable, or any other matter after a specific time are referred to as internal transactions. For Example, charge a depreciation of $3000.
Question-11: What’s a Cash Transaction?
Answer: Transactions that are completed for cash right after they occur are considered cash transactions. For Example, purchase a laptop for $2000 in cash.
Question-12: What’s the Credit Transaction?
Answer: Transactions that are not resolved for cash right after they occur are considered a credit transaction. For Example, purchase a table from Y International in credit.
Question-13: What’s a Non-Cash Transaction?
Answer: All transactions other than cash transactions and credit transactions are considered non-cash transactions. For Example, Return of defective goods purchased earlier.
Question-14: What’s the Visible Transaction?
Answer: Transactions that are visible and the outcomes or effects of those transactions have physical existence are called visible transactions—for Example, the purchase of products, furniture, machinery, etc.
Question-15: What’s the Invisible Transaction?
Answer: The outcomes or effects of transactions that are not visible are called invisible transactions. For Example, amortization of fixed assets, share discount, etc.
Question-16: What’s a Business Transaction?
Answer: Day-to-day transactions that are created to operate a business are called business transactions. For Example, Sales, Buy, Salaries, etc.
Question-17: What is the Non-Business Transaction?
Answer: Social service-oriented transactions are referred to as non-business transactions. For Example, subscription or donation to various social organizations.
Question-18: What’s a Personal Transaction?
Answer: A person’s personal life transactions are called personal transactions. For Example, wedding day expenses, festival expenses, etc.
Question-19: What documents are used as documentary evidence in transactions?
Answer: The documents used as documentary evidence in transactions are as follows:
- Chalan or invoice
- Bill and Cash Memo
- Debit Note
- Credit Note
Question-20: What’s the Invoice?
Answer: The invoice is the documentary proof of purchase or sale. The seller prepares the invoice in triplicate for the goods sold and gives a copy to the purchaser.
Question-21: What’s the Cash Memo?
Answer: The seller prepares a cash memo to sell goods on cash and gives it to the buyer. In general, cash memos are prepared in triplicate forms.
Question-22: What is a Voucher?
Answer: Vouchers are the documentary evidence of transactions like cash sales, cash purchases, expenditure, income, etc.
Question-23: What is Debit Voucher?
Answer: Vouchers used for the purchase and various expenses are called debit vouchers. Debit vouchers are prepared from bill or cash memo.
Question-24: What is a Credit Voucher?
Answer: Vouchers used for sales and various incomes are called credit voucher.
Question-25: What is a Debit Note? And what is a Credit Note?
Debit Note: The letter which is used for returning goods to the seller is called a debit note.
Credit Note: When a seller gets a return of goods, he sends a letter stating therein a quantity of goods rate, price to the purchaser informing him that his account is credited for this return. This letter is called a credit Note.
I hope, at the end of the article, you understand the accounting transactions. Read these Top “25” Questions and Answers- Accounting Transactions regularly and develop your accounting skills.
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