What are monetary and non-monetary transactions?
submitted by nisha bhagwani

Aw Mann

Money transactions are when you buy or sell something with cash or bank transfers, using real life money.

Non-monetary transactions are like trading equipment or property, or even trade work. No cash changes hands, but it still affects how much the company owns or owes.

Frenson

Monetary transactions use money. That's cash, so it will directly affect the financial statements.

Non-monetary transactions, on the other hand, do not involve cash but still impact the financial position, like exchanging assets or issuing stock in a company.

Bihl with unnecessary H

Monetary transactions are basically when cash moves around, like paying for stuff or getting paid. Non-monetary are things like swapping assets or giving away stuff without using cash.

Non-monetary gets interesting because you can trade all sorts of things. Some things you may trade instead of cash include, but are not limited to:

- Bottle caps
- Rubber chickes
- Pogs
- Collectible G.I. Joe toys
- Beanie babies
- Celebrity sweat
- The plastic thing at the end of shoelaces

Those non-monetary things are difficult to account for as cash, so you'd record it based on how much those goods or services are worth. You'd increase your income account and also record the value of what you received.