Business Transactions

Actions or activities inside or related to the business organizations are its business transactions.

A Business Transaction is exchanging of values between transacting persons/parties.

Exchange of values means that one value is received in return or in exchange for another value parted with. 

Value means that thing desired or desirable with money’s worth. Thing of value may come in the form of property or a right and protection.

In accounting, the thing of value is recorded whether received or parted with, in terms of money received or paid for it and as to when the value is received or parted with. 

The business transactions must be recorded, classified and summarized periodically in financial terms so in order for a business organization to come up with financial conditions as of a given time, results of operations during the period, and sources and applications of fundings during the period. The processes of recording, classifying and summarizing are the bookkeeping phase of accounting.  They are the starting and necessary phase.