What are accounting transactions?

Accounting transactions are defined as events that require recording because they affect the financial statements of an entity. This involves any activities that have a monetary impact on the company, such as sales, purchases, expenses, and capital contributions. Each of these transactions is documented in the accounting records to accurately reflect the financial position and performance of the business.

In this context, options that refer to changes in company policies, overall market movements, or internal personnel changes do not fit the definition of accounting transactions. Changes in company policies may influence operations or strategy but do not directly impact the financial statements. Overall market movements capture economic changes that can influence a business but are not specific transactions that require accounting entry. Similarly, hires and promotions pertain to human resource management and do not have a direct financial impact unless they result in payroll expenses or related costs being recorded. Therefore, the focus on events requiring recording that affect financial statements accurately describes accounting transactions.