Which of the following are examples of business transactions?

• A. Purchasing inventory for cash
• B. Discussing marketing strategies in a meeting
• C. Hiring a new employee without signing a contract
• D. Setting company goals for the next year

Answer: (A)

Verified step by step guidance

1. Step 1: Understand the definition of a business transaction. A business transaction is an event that has a financial impact on the business and can be recorded in the accounting system. It typically involves the exchange of goods, services, or money.
2. Step 2: Analyze the first example: 'Purchasing inventory for cash.' This involves the exchange of money for inventory, which affects both the cash account and the inventory account in the financial records. Therefore, it qualifies as a business transaction.
3. Step 3: Analyze the second example: 'Discussing marketing strategies in a meeting.' This activity does not involve any financial exchange or impact on the accounting records. It is a planning activity and does not qualify as a business transaction.
4. Step 4: Analyze the third example: 'Hiring a new employee without signing a contract.' While hiring an employee is an important operational activity, it does not immediately involve a financial exchange or impact the accounting records unless a contract is signed or payment is made. Thus, it does not qualify as a business transaction.
5. Step 5: Analyze the fourth example: 'Setting company goals for the next year.' This is a strategic activity and does not involve any financial exchange or impact on the accounting records. Therefore, it does not qualify as a business transaction.