At the end of financial year, Goods worth 40,000 Rs were sold & the cl
A. An event
B. A transaction
C. Both of the above
D. None of the above
Right Answer is: A
• A transaction is an agreement between a seller and a buyer to exchange goods, services or financial instruments.
• Unsold goods i.e. Closing stock is recorded in the financial statements as ‘Current Assets’.
• An event can be external or internal. This is an internal event.
• There is no exchange of goods or services or money. Thus, this cannot be termed as a ‘transaction’.