In this article, we will learn in-depth about the event including its definition, examples, classification, features, and much more.
What is an Event?
An event is a term used to describe something that occurs. An event is one of the activities that occur every day in a person’s personal, family, social, state, and economic life. For example, getting up every morning, going to college, shopping, participating in sports, studying, etc.
An event refers to a process or part of a process having a particular moment and place of occurrence.Aric Luis Kohler says,
In fact, every aspect of human life is an event. However, from the standpoint of accounting, events are treated differently.
In accounting, events are actions taken by a person or a company that causes the company’s financial situation to change.
Example of Event:
Playing Football, Shopping, Weeding ceremonies, Cultural Festivals, buying and selling goods, payment of salaries and wages, purchase of land, etc. are a few examples of events.
Classification of Event
The innumerable events that take place in the larger activities of human life can be divided into two parts:
- Financial events and
- Non-financial events
Events that are related to money are called financial events. That is, events that change the financial condition of an individual or organization are called financial events.
For example, buying and selling goods, marketing, paying salaries, opening a bank account, depositing money in a bank, etc. In the language of accounting, financial events are transactions.
Events that are not related to money are called non-financial events. That is, events that do not change the financial condition of the person or organization are called non-financial events.
Such as ordering the purchase of goods, passing the test, death of someone, hiring of employees, etc. Accounting does not consider non-financial events.
Features of the Event
Whether the event is financial or non-financial, it will have some features mentioned below:
Events are usually short-term. For example, going to the daily market, going to college, etc. Again, some events can be long-term. For example, different types of games, wedding festivals, cultural festivals, etc.
2. Independent and Self-Sufficient:
Each event is independent and self-sufficient. Each event may create a single accounting unit and may require separate accounting.
For example, if you buy goods on credit in the morning and pay the price in the afternoon, there will be two financial incidents. However, there are some events that are related to other events but not dependent.
Events have financial or non-financial or both types of value. For example, voluntary blood donation has a human value and the purchase of goods worth $3,000 has a financial value.
4. Nonprofit Seeking:
There are some events that usually do not happen for profit. Examples of such events are those that usually occur in personal, family, and social life.
For example, going to the daily market, going to play football, going to school and college, wedding ceremonies, etc.
5. Specific Purpose:
Each event has a specific purpose. For example, the FIFA World Cup is held every four years to determine the world champion.
Events can be self-interested or selfless. For example, buying goods is a self-interested event but begging is a selfless event.
The event ends with the achievement of the purpose for which the event took place.
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