Transaction

Meaning :

A transaction refers to any activity where money is exchanged for goods, services, or value, involving two parties: a payer and a receiver. Transactions can be

cash-based, digital, or credit-based.

Example : 

For example, making a payment of ₹200 using UPI to buy groceries is a transaction.

How to Understand : 

A transaction represents the movement of money from one person or account to another.

It is recorded as:

•Debit: when money goes out

•Credit: when money comes in

Every financial activity, such as shopping, paying bills, or sending money, qualifies as a  transaction.

Importance :

Transactions are fundamental to all economic and business activities, facilitating smooth operations.

They assist in tracking spending and income, helping individuals manage their finances effectively.

Transactions are essential for accounting and maintaining accurate financial records.

They enable digital payments, making transactions faster and more convenient.

Transactions promote accountability and transparency in financial matters.