Which of the following is not a business transaction?

• A. Erin provided services to customers earning fees of $600.
• B. Erin pays her monthly personal credit card bill.
• C. Erin deposits $15,000 in a bank account in the name of Erin's Lawn Service.
• D. Erin purchased hedge trimmers for her lawn service agreeing to pay the supplier next month.

Answer: (B)

A business transaction is an economic event that changes the business’s financial position, such as earning revenue, incurring expenses for operations, acquiring assets for use in the business, or owner contributions to the business. Providing services for a fee clearly fits this, because it increases cash and records revenue. Depositing money into the business account represents an owner investment, boosting both cash and owner’s equity, which is also a business activity. Buying hedge trimmers on credit is a business purchase that increases assets and creates a liability, another valid business transaction.

Paying a personal credit card bill, however, is not tied to the business’s activities. It involves the owner’s personal finances and does not affect the business’s revenue, expenses, assets used in operations, or owner’s equity. If anything, it reflects a personal payment rather than a business transaction. Therefore, this is not a business transaction.