What is a business event?

A business event is the event that forms the basis for a verification in a company’s accounting. In other words, it is a financial transaction that has an effect on the company’s finances. This could, for example, be a purchase that in this way increased costs and inventories. It can also be about a payment to the company, such as when a customer buys an item or if a customer pays an invoice.

What does not count as a business event?

Since a business event is only one that immediately affects the company’s finances or composition, for example, an order or order is not a business event. However, the payment of the order or order is a business event that is booked because the payment directly affects the company’s finances.

Business events must be recorded

All company business events must be accounted for by law. Every business event must therefore have some form of documentation that can be documented in the accounting. It is this documentation that is called a verification . A voucher can, for example, be an invoice, a receipt, bank statement or some other form of document that proves that the business event took place.

Do you need help with accounting? Receive 3 quotes to accounting consultants completely free of charge via the button below

Receive 3 quotes

Business events without accounting

Business events also occur for non-profit associations liable for accounting, even though they do not conduct business activities. This may, for example, involve the payment of premises rent or the payment of membership fees.

Business event according to the Accounting Act

The Accounting Act (1999: 1078) Chapter 1 Section 2 defines a business event as follows:

“All changes in the size and composition of a company’s assets that are due to the company’s financial relations with the outside world, such as deposits and payments, incurred receivables and liabilities and own additions to and withdrawals from the business of money, goods or other.”

 

Leave a Comment