Transaction

Meaning :

A transaction is defined as any activity in which money is exchanged for goods, services, or value, involving two parties: a payer and a receiver. Transactions can take

place in cash, digitally, or through credit systems.

Example : 

For instance, paying ₹200 via UPI to purchase groceries exemplifies a transaction.

How to Understand : 

A transaction signifies the transfer of money from one person or account to another.

It is recorded as:

•Debit: representing money going out

•Credit: representing money coming in

Each financial activity, including shopping, bill payments, and money transfers,  constitutes a transaction.

Importance :

Transactions form the foundation of all economic and business activities, ensuring operational efficiency.

They are vital for tracking spending and income, aiding individuals in financial management.

Transactions are necessary for accounting practices and accurate financial record- keeping.

They facilitate digital payments, enhancing the speed and convenience of transactions.

Transactions ensure accountability and transparency in financial dealings, fostering trust.