Definition of transaction

The word "transaction" originated in the Middle Ages when it was used to describe legal proceedings or business negotiations. The term derived from the Latin "transactio," which meant a settlement or adjustment between parties. This concept evolved to describe any exchange or interaction involving the transfer of value, resources, or information between two or more entities. In business and economics, a transaction is defined as an economic exchange between a buyer and a seller, resulting in the transfer of ownership or use rights of a product or service. The modern usage of "transaction" is a broad term that encompasses both financial and non-financial exchanges, such as sales, acquisitions, mergers, partnerships, joint ventures, and collaborations. Regardless of its type, a transaction has a clear beginning, middle, and end, and comprises various stages, including negotiation, agreement, implementation, and closure.