What is the Transaction & How to write a transaction note
What is a Transaction | Transaction note | Transaction documents
The transaction is a Sentence that contains the details of the exchange of the company and Transaction note is a Book that records the details of the transaction documents provided by each department of the company. Transaction documents is the Evidence of purchase and sale of goods and receipt and payment of money
How to write a transaction note?
write a transaction note is easy but it is important to write it clearly. There are some things to keep in mind while writing the transaction note, the transaction note must specify The name, exchange details, value.
But many students make some mistakes in this. They record the transaction without mentioning the name, for example, the goods were bought for 70 $, in which what is wrong is not mentioning the name. You have seen such transactions in most of the book so you think there will be similar transactions in business too, but that is wrong. Such transactions are used to make it easier for students to teach, but if you are registering a transaction note with a company you must specify the name, exchange details, and value, Trasection Category
goods (EX) were purchased from Rahul (N) for $ 70(V) on cash
How to record a transaction note ?
There are two methods to Record a transaction note
- Accrual basis accounting
- cash basis accounting
Accrual basis accounting
On the day of the transaction in Accrual basis accounting method the transaction is recorded in the transaction note
Cash basis accounting
Transaction will be recorded only if the cash is transferred according to this cash basis accounting method
Example
(08/01/29) The first day is the rent day but what happens, if the rent is not paid on that day.
This transaction will be recorded in Accrual accounting method, but not recorded in cash basis accounting method.
Accrual basis accounting
- (08/01/29) Outstanding rent
cash basis accounting (unrecorded)
- (08/01/29) .......
(08/05/29) rent is paid
- (08/05/29) outstanding rent is paid
Accrual basis accounting
This is the most commonly used method and it is an best Transaction recording method
- (08/05/29) rent is paid
cash basis accounting
Small businesses follow this recording method
Trasection Category
- Cash Transaction
- Credit Transaction
- Credit payment Transaction
- Transfer Or Contra Entry
- adjustment entry
Learn more about the Trasection Category page Reed Now
Documents required for transaction notes
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The Human resource management should inform the accounting department about the number of employees in the company and their salary, wages, and benefits.
Details of goods purchased by the purchase Department should be sent to the Accounts Department immediately .( invoice)
Similarly the sales department should send the sales related details to the accounting department. (invoice)
The production department should send details of how many units it has produced and the (WIP) unit and scrap to the accounting department.
The storage department should send details of how much inventory is stored to the accounting department
The maintenance department will send details of certain expenses of the company to the accounting department
The management department sends details of financial expenses and income and the transfer entry order to the accounting department
Finance department
- Details regarding the amount paid for the purchase of goods
- Details regarding the amount received from the sale of goods
- Details regarding company expenses
- details regarding financial expenses and income
The transaction note is prepared on the basis of such documents
example of Transactions note
Just as the foundation is important for building a building, so too is the transaction note important for preparing an account.
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