Question

Chapter 1 Accounting in Business Transaction Analysis i Business activities can be described in terms of transactions and events. External transactions are exchanges of value between two entities, which yield changes in the accounting equation. An example is the sale of the AppleCare Protection Plan by Apple. Internal transactions are exchanges within an entity, which may or may not affect the accounting equation. An example is Twitter's use of its supplies, which are reported as expenses when used. Events refer to happenings that affect the accounting equation and are reliably measured. They include busi- ness events such as changes in the market value of certain assets and liabilities and natural events such as floods and fires that destroy assets and create losses. This section uses the accounting equation to analyze 11 selected transactions and events of FastForward, a start-up consulting (service) business, in its first month of operations. Remem- ber that each transaction and event leaves the equation in balance and that assets always equal the sum of liabilities and equity.

What is difference between Events & Transactions ????

Give me an example and identify where is event and transaction ????

Answer 1

Difference Between Events and Transactions are provided below:

S. No.	Events	Transaction
1	All events are not considered transaction.	All transactions are considered as events.
2	An event may or may not occur changes in the financial position of a person or organization.	Transaction brings financial change .
3	Financial changes may or may not measurable in monetary tersm.	Any financial changes occured in transaction can be measured in monetary terms.
4	Events may be incurred which may or may not require two parties.	In case of transaction, two parties are to be involved.
5 Example	Death of skill and talented employee may result in huge loss in operations, however it cannot be measured in monetary terms	Sale in cash to a customer.