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Difference Between Event and Transaction

The document discusses the difference between an event and a transaction in accounting. An event can be anything that happens, financial or non-financial, while a transaction must involve a financial change between two parties. Transactions are a subset of events that meet specific criteria, such as having a monetary value and requiring two parties and financial changes.

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431 views

Difference Between Event and Transaction

The document discusses the difference between an event and a transaction in accounting. An event can be anything that happens, financial or non-financial, while a transaction must involve a financial change between two parties. Transactions are a subset of events that meet specific criteria, such as having a monetary value and requiring two parties and financial changes.

Uploaded by

Yakkstar 21
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Difference Between Event and Transaction [Notes with

PDF]
everythingaboutaccounting.info/2020/03/difference-between-event-and-transaction.html

March 21, 2020

Today we will learn what is the difference between Event and Transaction? Transactions
are created through events, but not all events can be called transactions.

Concept of the Double-Entry System ...


Concept of the Double-Entry System in Accounting | Double Entry System
Before we understand the difference between an event and a transaction, we first know
what is an event? and what is the transaction?  

Event:
Everything that happens in every moment of human life is an event. Events can be
financial and non-financial. There may be two parties in the event or not. The event may
be complete and may be incomplete.  

Transaction: 

The transaction is a phenomenon that is measurable by money and influences the


assets, liabilities, and ownership rights of any business entity. Each transaction must have
two parties and if there is no financial change then there will be no transaction.  

Difference between Event and Transaction


Although the events and transactions seem to be the same, there is a considerable
difference between them.

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The following are the differences between the event and the transaction:  

SN. Point of Event Transaction


Difference

1. Definition Everything that happens in Transactions are the events


human life is called an event. through which the financial
condition of the business
changes

2. Relation One event may or may not Each transaction is unique and
have a relationship with autonomous.
another.

3. Classification There are two types of There are different types of


events. Namely: financial transactions.
events and non-financial
events.

4. Magnitude The magnitude of the event is The magnitude of the


extremely wide. transaction is limited compared
to the event.

5. Party There is no need for a party to The transaction requires two


organize the event. parties.

6. Exchange In the event of an exchange In the event of an exchange of


of goods or services, it may or goods or services, it always
may not always happen. happens.

7. Documentary It is not necessary to have a The transaction must have a


Evidence valid document for the event. valid document.

8. Record of It may or may not be It is necessary to hold an


Accounts necessary to hold an account account for every transaction.
for the event.

9. Motive There may not be a specific There must be a purpose behind


motive behind the event. every transaction.

10. Monetary There may or may not be The transaction must have a
Value monetary value in the event. monetary value.

11. Financial Financial changes do not Every transaction must have


Change have to happen by an event. financial changes.

I think you’re clear about what is the difference between event and
transaction? Don’t forget to comment on us, if you have any confusion.
 You may also read:

Accounting Transaction
Understanding the Accounting Equation
Debit and Credit in Accounting

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The Best Accounting Job Interview Questions and Answers

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