Which of the following is an event? 
  • a)
    Sale of goods for Rs.5,000
  • b)
    Closing stock of worth Rs.4,000
  • c)
    Purchase of goods for Rs.8,000
  • d)
    Rent paid Rs.2,000
Correct answer is option 'B'. Can you explain this answer?

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Answers

Simran Sharma
Jun 10, 2018
Closing stock is an event.....remaining all are transactions but closing stock is not a transaction its an event

Srsps
Feb 18, 2022
The correct option is B.
In accounting terms, an event is simply an economic activity which can be cash or noncash which happens in day to day operation of a business which does not involves changes in account balances.
Difference between transaction and event is when an event brings change to account balances, it is classified as a transaction.
Therefore since in case of closing stock accounting, we are only presenting it in the books of final accounts, it is an event and not a transaction.

Closing stock is an event.....remaining all are transactions but closing stock is not a transaction its an event
Closing stock is an event.....remaining all are transactions but closing stock is not a transaction its an event