Business Transactions – SS1 Book Keeping Lesson Note (First Term)

Transaction involves the transfer of goods, services, money or money’s worth (e.g. assets) to and from a business organization.

Classifications of transactions 

1. Financial transactions which are recorded, summarized, classified and analyzed in accounting could be either of two types 
2. Cash Transactions: This occurs whenever goods are received by a person or business and payment is made immediately for such goods or services received. Payment in this sense could be either by cash, cheque, bank drafts, postal orders etc. 
3. Credit Transactions: This occurs whenever goods are received by a person or business and the payment for such goods received (or services enjoyed) is postponed or deferred to a future time.

 ASSIGNMENT 

Identify whether the transactions below are cash transactions or credit transactions

Jan 2:    Started business with N10,000 cash 

Jan 3:    Paid N7,000 of the business money into the bank 

Jan 7:    Paid rent of shop by cash N600

Jan 12:    Bought goods for cash N1,200

Jan 14:    Bought goods on credit from Ayodele N30,000

Jan 15:    Sold goods and received cheque in payment N14,000

Jan 20:    Bought Motor vehicle paying by cheque N9,000

Jan 25:    Paid salary of shop assistants by cheque N1,000

Jan 28:    Sold goods to Akinyemi N7, 000

Jan 31:    Bought furniture for cash N3,000