What is a transaction in the context of accounting?

In accounting, a transaction is defined as a record of financial dealings that involve the exchange of goods, services, or funds between parties. This includes any event that has a financial impact on an entity and can be measured in monetary terms. Each transaction is documented to reflect the changes in an organization’s financial position, influencing the accounting records such as the general ledger.

The other options represent different aspects of accounting but do not encapsulate the complete definition of a transaction. A summary of a company’s assets is part of a larger financial statement and does not reflect the active process of transactions. A detailed financial report, while useful for decision-making, is a compilation of multiple transactions and is not an individual transaction itself. An expense related to supplies describes a specific type of transaction but does not encompass all transactions within accounting, which can also include income, investments, and other financial interactions.