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On March 31, 2010 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, 2010 after sale of goods worth Rs. 2,000, he is left with...
Explanation:
The correct answer is option 'A' - An event.
Definition of Event:
An event is a happening of consequence, an observable occurrence that has a special significance.
Explanation:
In this given scenario, the sale of goods worth Rs. 2,000 and the closing inventory of Rs. 10,000 are events.
Sale of Goods:
The sale of goods worth Rs. 2,000 is considered an event because it is an observable occurrence that has a special significance. It involves the transfer of goods from the seller to the buyer in exchange for money. This event is significant because it affects the financial position of the seller and generates revenue.
Closing Inventory:
The closing inventory of Rs. 10,000 is also considered an event because it represents the value of unsold goods at the end of the accounting period. It is significant because it helps determine the cost of goods sold and the overall profitability of the business.
Difference between an Event and a Transaction:
- An event is a happening of consequence, while a transaction is a specific type of event that involves an exchange or transfer of value between two parties.
- A transaction is measurable in monetary terms and is recorded in the accounting books, while an event may or may not have a monetary value and may not be recorded in the books.
Conclusion:
In conclusion, the sale of goods and the closing inventory are events because they are observable occurrences with special significance. They may or may not be recorded as transactions in the accounting books, depending on their monetary value and relevance to the financial position of the business. Therefore, the correct answer is option 'A' - An event.
The correct answer is option 'A' - An event.
Definition of Event:
An event is a happening of consequence, an observable occurrence that has a special significance.
Explanation:
In this given scenario, the sale of goods worth Rs. 2,000 and the closing inventory of Rs. 10,000 are events.
Sale of Goods:
The sale of goods worth Rs. 2,000 is considered an event because it is an observable occurrence that has a special significance. It involves the transfer of goods from the seller to the buyer in exchange for money. This event is significant because it affects the financial position of the seller and generates revenue.
Closing Inventory:
The closing inventory of Rs. 10,000 is also considered an event because it represents the value of unsold goods at the end of the accounting period. It is significant because it helps determine the cost of goods sold and the overall profitability of the business.
Difference between an Event and a Transaction:
- An event is a happening of consequence, while a transaction is a specific type of event that involves an exchange or transfer of value between two parties.
- A transaction is measurable in monetary terms and is recorded in the accounting books, while an event may or may not have a monetary value and may not be recorded in the books.
Conclusion:
In conclusion, the sale of goods and the closing inventory are events because they are observable occurrences with special significance. They may or may not be recorded as transactions in the accounting books, depending on their monetary value and relevance to the financial position of the business. Therefore, the correct answer is option 'A' - An event.
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On March 31, 2010 after sale of goods worth Rs. 2,000, he is left with the closing inventory of Rs. 10,000. This isa)An eventb)A transactionc)A transaction as well as an eventd)Neither a transaction nor an eventCorrect answer is option 'A'. Can you explain this answer?
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