Which of the following is NOT a transaction to be recorded in the accounting records of a company?

• A. The company hires a new manager, but no contract is signed and no payment is made yet.
• B. The company receives payment from a customer for services rendered.
• C. The company pays rent for the current month.
• D. The company purchases office supplies for cash.

Answer: (A)

Verified step by step guidance

1. Step 1: Understand the definition of a transaction in accounting. A transaction is an event that has a financial impact on the company and can be measured reliably in monetary terms.
2. Step 2: Analyze each option provided in the problem to determine whether it qualifies as a transaction. For example, receiving payment from a customer for services rendered is a transaction because it involves a financial exchange and can be recorded in monetary terms.
3. Step 3: Evaluate the option where the company pays rent for the current month. This is a transaction because it involves a financial outflow and affects the company's financial records.
4. Step 4: Consider the option where the company purchases office supplies for cash. This is also a transaction because it involves a financial exchange and impacts the company's assets and cash balance.
5. Step 5: Examine the option where the company hires a new manager but no contract is signed and no payment is made yet. This is NOT a transaction because it does not involve a financial exchange or measurable monetary impact at this stage.