A transaction is an exchange or deal between two or more people or organizations. When you buy a candy bar at the store, that's a transaction: you give money, and the cashier gives you the candy. When your parents pay the electric bill online, that's a transaction between your family and the power company.

The word comes from business and finance, where it describes any trade, purchase, sale, or transfer of money or property. A bank keeps records of every transaction in your account, whether you're depositing birthday money or withdrawing cash. Your parents' credit card statement lists all their transactions for the month.

But transaction can describe any kind of exchange, including those that don't involve money. If you trade baseball cards with a friend, that's technically a transaction: you're both giving something and receiving something in return. Scientists and historians study ancient transactions to understand how people in different civilizations traded goods like salt, spices, or gold.

The word suggests something more formal or official than just casually swapping cookies at lunch. When you hear someone say “we completed the transaction,” they usually mean an important exchange has been finished and recorded. It's the difference between handing your friend a pencil and officially selling your old bicycle to a neighbor who pays you and gives you a receipt.