This rule applies to expenses and income such as salaries, sales, purchases and commissions. Items you can actually touch, such as cash, inventory, equipment, land or a building. For example, when accounting definition goods are purchased for cash, there is a movement of goods from the seller to the buyer and a movement of cash from buyer to the seller. Transactions may be external (between a business entity and a second party, e.g., goods sold on credit to Hari or internal (do not involve a sec...