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Recording Business Transactions Guide

The document discusses key concepts for recording business transactions including accounts, ledgers, journals, and the double-entry system. It provides examples of T-accounts, ledger formats, and journal entries. Recording transactions using accounts, ledgers, and journals provides advantages such as easy referencing, classification of transactions, facilitating the division of work, and assigning responsibility.

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6 views9 pages

Recording Business Transactions Guide

The document discusses key concepts for recording business transactions including accounts, ledgers, journals, and the double-entry system. It provides examples of T-accounts, ledger formats, and journal entries. Recording transactions using accounts, ledgers, and journals provides advantages such as easy referencing, classification of transactions, facilitating the division of work, and assigning responsibility.

Uploaded by

isaac
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

RECORDING BUSINESS TRANSACTIONS

• Accounts
• Ledger
• Chart of Accounts: Assets
Liabilities
Shareholders’ Equity
Revenues
Expenses
DOUBLE ENTRY SYSTEM

• Luca Pacioli – 1494


• Dual Aspect
• Debit & Credit
LEDGER
„T‟ Account : A Ledger account in simplified form.
TITLE OF ACCOUNT

Left or Debit side Right or Credit side

ANY ASSET / EXPENSE ACCOUNT

(Debit) (Credit)
Increase Decrease
Ledger
ANY LIABILITY / OWNER’S EQUITY / REVENUE ACCOUNT

(Debit) (Credit)
Decrease Increase

Standard Form of Accounts


ANY ACCOUNT
Date Explanation Ref Debit Credit Balance
JOURNAL
GENERAL JOURNAL

DATE ACCOUNT TITLE & EXPLANATION L.F DEBIT CREDIT


Rs. Rs.

2009
June 1 Cash 1,00.000
Share Capital 1,00,000
Invested Cash

June 2 Office Equipment 50,000


Cash 20,000
Creditors 30,000
Purchase of office equipment on part payment
SUB-DIVISION OF JOURNAL

1. Cash Book
2. Purchases Journal
3. Sales Journal
4. Purchases Return Journal
5. Sales Return Journal
6. Bills Receivable Journal
7. Bills Payable Journal
8. Journal Proper
ADVANTAGES
1. Classification of transactions
2. Reference becomes easy
3. Facilitate division of work
4. More particulars
5. Responsibility can be fixed
6. Facilitates checking
PURCHASES JOURNAL

Date Name of the Supplier Invoice No. L.F. Amount Remarks


SALES JOURNAL
Date Name of the Customer Out ward Invoice No L.F Amount Remarks

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