Internal Accrued Transactions

Date: 2015-10-07; view: 435.

Internal Transfer Transactions

External Accrued Transactions

External Exchange Transactions

The idea of an exchange, or a trading between two parties, underlies the concept of a transaction. While the description is satisfactory for most general purposes, for accounting purposes a transaction is defined in several special ways. One way, an external exchange transaction, refers to the exchange between the company and someone outside of the company.

The concept of an accrued (external) transaction, refers to those activities which result in a continuous transfer of services from one company to another.

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 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.