Max owns and operates a minimart. Which of Max’s actions described below are business transactions? Explain why any other actions are not considered transactions.

1. Max reduces the price of a gallon of milk in order to match the price offered by a competitor.

2. Max pays a high school student cash for cleaning up the driveway behind the market.

3. Max fills his son’s car with gasoline in payment for his son’s restocking the vending machines and the snack food shelves.

4. Max pays interest to himself on a loan he made to the business three years ago.

Accounting Concepts