P1 C2 Dual Effect of Transactions and Types ofAccounts — Account STD 11 Commerce — Question
Gujarat BoardEnglish MediumSTD 11 CommerceAccountP1 C2 Dual Effect of Transactions and Types ofAccounts2 Marks
Question
Explain internal and external transaction.
✓
Answer
$(A)$ Internal transaction: For certain business transactions, presence of third party is not required, but this type of transactions takes place in the business only and they are also recorded in the books of accounts are known as internal transactions e.g. Inter - departmental transfer of goods, depreciation all reserves etc.
$(B)$ External transaction: Transactions taken place between business and third parties are known as external transactions. External transactions are supposed to be recorded in the books of accounts. e.g. sold goods of $Rs.2,500$ to Zalak.
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