Process of Accounting terms

MEANING OF TRANSACTION

A Transaction is an event or happening that changes an organization's financial position and /or its earning.

RULES FOR DETERMINING CASH OR CREDIT TRANSACTION

1.Cash Purchase, cash sales and all Transaction where the word 'paid' is mentioned are to be treated as cash transaction. For Example: salary Paid, goods sold for cash etc.

2.When a personal name or the name of a firm is mentioned in the transaction, it will be treated as credit transaction. For Example, Goods Sold to X for Rs.500/-.

3.When both cash and personal name are mentioned in the transaction, it will be treated as the cash transaction. For Example, Goods Sold to Y for cash Rs. 1000/-.
Source Documents

1.Sales Order: A customer place order in writing or signs an order for goods and services he wishes to buy.
2.Purchase Order: A business makes an order from another business for the purchase of goods or services.
3.Invoices and credit notes: These are the discussed further below.
4.Petty cash voucher: It is prepared for petty cash expenses.
5.Credit card sales voucher: When Goods are sold against credit card, a credit card sales voucher is prepared by the seller and signed by the customer. Credit card sales are entered in the cash book of cash sales.


Reference: indiataxes.com, Kerala +2 commerce text books.