In accounting, the business transaction (also known as financial transaction) is an event that must be measurable in terms of money and that essentially impacts the financial position of the business. A business transaction involves two parties in between for settling it. No transaction is possible in absence of two parties. There is always one giver and one receiver in the transaction. An important principle while making the analysis of business transactions that "every business transaction brings about at least a double change in the financial position of a business concern". These two changes may take place in any one or more basic elements of accounting. There is no exception to this principle. There may be numerous events related to a business to which we cannot reliably assign a dollar value. Such conditions or events cannot be called business or financial transactions.

Abhijith S

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