Accounting events in a business refer to the various transactions and occurrences that have a financial impact on the entity.
• These events are recorded in the accounting system to capture the changes in the financial position of the business.
• A business transaction is a business activity that can be objectively measured in term of money.
Types of Accounting Events:
Business event may be classified as under:
External Transaction (Events):
External transactions, also known as external events, are those events that involve the exchange of economic resources between the business entity and external parties.
• Examples of external transactions include sales to customers, purchases from suppliers, borrowing money from a bank, or receiving cash from investors.
Internal Transaction (Events):
Internal transactions, or internal events, refer to events that occur within the business entity and do not involve external parties.
• Examples include adjustments for depreciation, the transfer of assets between departments, or internal cost allocations.
