Question

Ram paid rent of Rs 10,000. This can be classified as _____________.

• A. An event
• B. A transaction
• C. A transaction as well as an event.
• D. Neither a transaction nor an event.

Answer 1

The correct option is B A transaction

'Transaction' involves money or money's worth, and hence, has a financial impact in the books of accounts.

Event may or may not have a financial impact in the books of accounts.

Example: Change of Operations Manager of the company.

In the given example amount paid as rent involves a financial element as amount is paid by one person to another.

Therefore, it is a transaction and not an event.