Business organisations and transactions - Transactions

6 important questions on Business organisations and transactions - Transactions

What are [3] important transactions in all business organisations?

  • Sales
  • Purchases
  • Paying employees

What are sales transactions?

Provision of goods or services in return for payment. They bring in income (or revenue)

What is a purchase transaction?

A purchase transaction brings goods or services into an organisation and commits that organisation making a monetary payment.
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In business and accounting what different purchasing transactions exist?

  • Purchases
  • Non-current assets
  • Expenses

What is meant with authorisation of transactions?

Authorisation of transactions involves a second person agreeing or approving a transaction before it proceeds.

Why is an authorisation for purchases important?

Purchases mean money leaving the organisation either at the time of purchase or later if purchased on credit. The higher the value of the purchase, the greater the need for effective control and authorisation.

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