Two Types of Business Transactions In Accounting
We already studied about “ What is a Transaction ” and “ Difference Between Capital And Revenue ” but here we will consider the 2 Types / Kinds of Business Transactions used in accounting according to the character / feature of transactions. These are Capital Transactions and Revenue Transactions. Capital Transactions have long-term effect because these can be used for long period of time or more than one year. Examples are Purchase of Furniture, Machinery, Buildings, etc are Capital Transactions. Revenue Transactions have short-term effect because these are used for short time mostly less than or equal to one year. Examples include Paid Rent Expense, Salaries Paid, Goods sold for Cash, etc. Expenditures are the outflows as our business is spending the money to get benefit in future while Receipts are receiving of the money as our business provides services to customers or sold the Assets or receive other income. As in a Business T...