Internal Transfer Transactions

To expand on the concept of internal transactions, note that it does not refer to an exchange with another company; it refers to the transfer of resources from one internal area to another internal area. Typically, internal transfer transactions refer to the transfer of resources from one department to another, or of responsibility for them from one per­son to another.

Internal Accrued Transactions

Internal accrued transactions represent the continuous transfer of resources from one area to another within the company. They are rec­ognized periodically, generally at the end of each month, in the manu­ally maintained accounting record.

Summary

Relying on the observation that business activities ultimately result in an exchange of some type, the accounting discipline for recording data on business activity uses the concept of a transaction to indicate when an activity has occurred.

As this chapter illustrates, a systematic recording of transactions by different recording processes provides a description of business activities. The transactions concept may also be used to describe fu­ture or planned activities and current or standard activities.

I. Key terms. Read, translate and memorize the following definitions:

Transaction —операція, проведення, угода — an exchange be­tween a business and one or more external parties and certain other events, such as fire loss.

Business —ділова операція, господарська операція — we call

transaction a transaction a procedure when a business deals with a

creditor, a customer or others with whom an organiza­tion carries on business. A transaction provides a means for measuring activity and it means the flow of eco­nomic resources, or rights to the resources from one ac­counting entity to another. Future —майбутні (ф'ючерсні) операції — by measuring

transactions and communicationg information on possible future transactions, accounting reveals those activities which appear to be most desirable for the entity to carry out in the future.

Current —поточні операції, поточні розрахунки — by meas-

transactions uring and communicating information on current trans­actions accounting reveals the current state of the en­tity's activities.

Past —минулі операції — measurement and communica-

transactions tion of past transactions provide the description of the

entity's activities over a period of time. External —зовнішні (ділові) операції — they involve activities

transactions between an entity and someone outside the entity. Internal —внутрішні господарські операції, проведення they

transactions involve the activities within the company. Transaction —операційний аналіз — the process of studying a analysis complete transaction to determine its economic effect

accrued transaction initially, adv. equities of a business claim, n. dissolve, v.

transfer, n. excess of the assets received culminate, v.

authorisation, n. verification, n. insights, n.

on a business in terms of the fundamental accounting models: Assets = Liabilities + Owner's Equity.