A financial transaction is an exchange of money for goods, services, or assets. This can happen in various ways, such as buying groceries at a store, paying for a movie ticket, or transferring money to a friend. Each transaction typically involves a buyer and a seller, and it can be completed using cash, credit cards, or digital payment methods like PayPal or Venmo. These transactions are recorded in financial systems to keep track of income and expenses. This helps individuals and businesses manage their finances effectively. For example, a bank statement shows all transactions made over a month, helping people understand their spending habits.