On 31st December, 2005, Ashok Ltd. purchased a machine from Mohan Ltd. for Rs. 1,75,000. This is : (year end : 31st December)

a)
A transaction

b)
An event

c)
Both transaction as well as event

d)
None of these

Correct answer is option 'C'. Can you explain this answer?

Question

On 31st December, 2005, Ashok Ltd. purchased a machine from Mohan Ltd. for Rs. 1,75,000. This is : (year end : 31st December)

a)
A transaction
b)
An event
c)
Both transaction as well as event
d)
None of these

Correct answer is option 'C'. Can you explain this answer?

Answer

Transaction means a business, performance of an act, an agreement while event signifies a happening, as a consequence of transaction, a result. Thus, purchase of Machinery on 31st Dec, 2005 i.e. last day of accounting year will be a transaction as well as event.

Answer

The machiney was purchased that's why it is a transaction and it was purchased on closing date of a accounting period so it is a event b'coz on that day we can close our accounts.

Answer

Explanation:
The given transaction/event involves the following aspects:

1. Parties involved: Ashok Ltd. and Mohan Ltd.
2. Nature of transaction/event: Purchase of a machine
3. Date of transaction/event: 31st December, 2005
4. Amount involved: Rs. 1,75,000

Based on the above aspects, we can understand that the given transaction/event satisfies the criteria for both a transaction and an event. Let's understand the meaning of these terms:

Transaction: A transaction is a financial event that involves a transfer of economic resources between two parties. It results in a change in the financial position of the parties involved. In the given case, Ashok Ltd. purchased a machine from Mohan Ltd. for Rs. 1,75,000. This involves a transfer of economic resources (the machine) from Mohan Ltd. to Ashok Ltd. and a corresponding transfer of funds (Rs. 1,75,000) from Ashok Ltd. to Mohan Ltd. Hence, the given event qualifies as a transaction.

Event: An event is a happening of consequence, an observable occurrence that affects an entity's financial position. It may or may not involve a transfer of economic resources. In the given case, the purchase of the machine by Ashok Ltd. from Mohan Ltd. is an observable occurrence that affects Ashok Ltd.'s financial position. It results in an increase in Ashok Ltd.'s assets (the machine) and a decrease in its funds (Rs. 1,75,000). Hence, the given event also qualifies as an event.

Therefore, we can conclude that the given transaction/event satisfies the criteria for both a transaction and an event. Hence, option C is the correct answer.

Answer

Transaction and event in accounting:

In accounting, a transaction refers to any business activity that involves the exchange of goods, services or money between two or more parties. An event, on the other hand, refers to any occurrence that affects a company's financial position but may not necessarily involve a transfer of goods, services or money.

Explanation of the given scenario:

In the given scenario, Ashok Ltd. purchased a machine from Mohan Ltd. for Rs. 1,75,000 on 31st December, 2005. This transaction involves the exchange of money and goods, which makes it a transaction.

At the same time, the purchase of the machine also affects the financial position of Ashok Ltd. This is because the company's assets have increased by the value of the machine, while its cash balance has decreased. Therefore, the purchase of the machine is also an event.

Conclusion:

Thus, we can say that the purchase of the machine by Ashok Ltd. from Mohan Ltd. is both a transaction and an event in accounting.

Answer

Option c because it is an transaction as we purchased machinery but also an event becz it is purchased on closing date

Answer

It is a transaction by purchasing and it is event for end result.

Answer

C

Answer

The machine was purchased by Ashok Ltd. so it is a transaction and it is an event as well because it was purchased on closing date .

Answer

Both event as well as transaction
transaction because purchase of a machinery
event because last date of accounting period

Answer

Event it means Monterey transaction of money

Similar CA Foundation Doubts

On 31st December, 2005, Ashok Ltd. purchased a machine from Mohan Ltd. for Rs. 1,75,000. This is : (year end : 31st December)

Q. 2 On March 31, 2015 after sale of goods worth Rs.50,000, he is left with the closing inventory of Rs.20,000. This is: A. An event B. A transaction C. A transaction as well as an event D. Neither a transaction nor an event?

At the time of valuing stock on 31.3.2019 a sum of Rs. 50,000 was written off a particular item which was originally purchased for Rs.1,80,000 and was sold for Rs.1,00,000. But for the above transaction the gross profit earned during the year was 25% on cost?

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