A business transaction is an economic event with a third party that is recorded in an organization's accounting system. Such a transaction must be measurable in money. Examples of business transactions are:
- Buying insurance from an insurer
- Buying inventory from a supplier
- Selling goods to a customer for cash
- Selling goods to a customer on credit
- Paying wages to employees
- Obtaining a loan from a lender
- Selling shares to an investor
High-volume business transactions may be recorded in a special journal, such as the purchases journal or sales journal. Once business transactions are entered into these journals, they are periodically aggregated and posted to the general ledger. Lower-volume transactions are posted directly to the general ledger. These transactions are eventually summarized into the firm's financial statements.
A business transaction should always be supported by a source document. For example, the purchase of inventory from a supplier could be supported by a purchase order, while the payment of wages to an employee could be supported by a timesheet.