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On March 31, 2011 after sale of goods worth Rs. 2,000, he is left with the closing inventory of Rs. 10,000. This is
- a)An event
- b)A transaction.
- c)A transaction as well as an event.
- d)Neither a transaction nor an event
Correct answer is option 'A'. Can you explain this answer?
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Most Upvoted Answer
On March 31, 2011 after sale of goods worth Rs. 2,000, he is left with...
We can say that a event is result after the transaction. So value of closing inventory is result after the transaction so we can say that it is "an event" .
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On March 31, 2011 after sale of goods worth Rs. 2,000, he is left with...
Explanation:
This question is related to basic accounting concepts of transactions and events.
- Transactions: Transactions are the monetary exchanges or events that take place between two entities. They are recorded in the books of accounts as they have a monetary value attached to them. For example, the purchase of goods, sale of goods, payment of expenses, etc.
- Events: Events are occurrences that happen in the normal course of business but do not have any monetary value attached to them. They are not recorded in the books of accounts. For example, a fire in the factory, a strike by workers, etc.
In this question, it is given that the person sold goods worth Rs. 2,000 and has a closing inventory of Rs. 10,000. Now, we need to identify whether this is a transaction or an event.
- It is not a transaction as there is no exchange of money involved. The person has not received any money for the closing inventory.
- It is an event as it is a normal occurrence that happens in the course of business. The closing inventory is a part of the balance sheet and is required for the preparation of financial statements.
Therefore, the correct answer is option 'A' - An event.
This question is related to basic accounting concepts of transactions and events.
- Transactions: Transactions are the monetary exchanges or events that take place between two entities. They are recorded in the books of accounts as they have a monetary value attached to them. For example, the purchase of goods, sale of goods, payment of expenses, etc.
- Events: Events are occurrences that happen in the normal course of business but do not have any monetary value attached to them. They are not recorded in the books of accounts. For example, a fire in the factory, a strike by workers, etc.
In this question, it is given that the person sold goods worth Rs. 2,000 and has a closing inventory of Rs. 10,000. Now, we need to identify whether this is a transaction or an event.
- It is not a transaction as there is no exchange of money involved. The person has not received any money for the closing inventory.
- It is an event as it is a normal occurrence that happens in the course of business. The closing inventory is a part of the balance sheet and is required for the preparation of financial statements.
Therefore, the correct answer is option 'A' - An event.
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On March 31, 2011 after sale of goods worth Rs. 2,000, he is left with the closing inventory of Rs. 10,000. This isa)An eventb)A transaction.c)A transaction as well as an event.d)Neither a transaction nor an eventCorrect answer is option 'A'. Can you explain this answer?
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On March 31, 2011 after sale of goods worth Rs. 2,000, he is left with the closing inventory of Rs. 10,000. This isa)An eventb)A transaction.c)A transaction as well as an event.d)Neither a transaction nor an eventCorrect answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about On March 31, 2011 after sale of goods worth Rs. 2,000, he is left with the closing inventory of Rs. 10,000. This isa)An eventb)A transaction.c)A transaction as well as an event.d)Neither a transaction nor an eventCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for On March 31, 2011 after sale of goods worth Rs. 2,000, he is left with the closing inventory of Rs. 10,000. This isa)An eventb)A transaction.c)A transaction as well as an event.d)Neither a transaction nor an eventCorrect answer is option 'A'. Can you explain this answer?.
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