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
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Simran Sharma
Jun 10, 2018 |
Closing stock is an event.....remaining all are transactions but closing stock is not a transaction its an event
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Srsps
Feb 18, 2022 |
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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
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Closing stock is an event.....remaining all are transactions but closing stock is not a transaction its an event
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