Differences between Event and Transaction

Arjun EP

Published on: September 14, 2020

What are the differences between event and transaction?

Events

From an accounting point of view, only those events which bring changes in the financial position of a person or an organization are recognized as financial events.

Transactions

In accounting terms, transaction means monetary or financial transactions; these transactions are corded in the book of accounting for future purpose.

#######

Click on link for YouTube videos topic wise :
Accounting Equation	http://tiny.cc/c89jkz
Basic Journal Entries in Nepali	http://tiny.cc/uaakkz
Basic Journal Entries	http://tiny.cc/8aakkz
Journal Entry and Ledger	http://tiny.cc/caakkz
Ledger Account	http://tiny.cc/haakkz
Subsidiary Book	http://tiny.cc/399jkz
Cash Book	http://tiny.cc/889jkz
Trial Balance and Adjusted Trial Balance	http://tiny.cc/c59jkz
Bank Reconciliation Statement (BRS)	http://tiny.cc/q59jkz
Depreciation	http://tiny.cc/ugakkz
Click on link for YouTube videos chapter wise:
Financial Accounting and Analysis (All videos)	http://tiny.cc/jlersz
Accounting Process	http://tiny.cc/mlersz
Accounting for Long Lived Assets	http://tiny.cc/plersz
Analysis of Financial Statement	http://tiny.cc/slersz

#####

Differences between Event and Transaction

Bases	Event	Transaction
May or not	All events are not transactions.	All transactions are events.
Change	An event may or may not bring change in the financial position.	An event must bring change in financial position.
Measurable	Financial changes caused by events may or may not be measurable in terms of money.	The financial changes caused by transactions must be measurable in terms of money.
Parties	Events may or may not require two parties for the occurrence of an event.	In financial transaction, two parties are must.
Transfer	Transfer of goods or services may or may not occur for an event.	Generally, transfer of goods or service is a must; some exception; goods loss by fire, depreciation on fixed assets etc.
Recording	It is not necessary to record every event in the books of accounts.	Every financial transaction must be recorded in the book of accounting.
Cash or credit	Transaction relating event is settled for cash.	Financial transaction may be in cash or credit.
Scope	The scope of the event is very wide.	The scope of the transaction is limited.