NCERT Solutions for Class 11 Accountancy Chapter 3 Recording of Transactions 1

What is Accounting? 

Accounting is termed as a language of business that is used to communicate the information or the results of business operations to several interested people like investors, creditors, government, and so on. The principal objective of accounting is to analyze the profit or loss position of the business. It is very essential to maintain a systematic record of business transactions in accounting books. 

Vedantu’s study material for NCERT Accountancy Book Class 11 Solutions Chapter 3, cover several practical examples that will help you to understand the concepts of accounting. 

Advantages of Accounting

Accounting records are considered as “the eyes and ears of a business”. The following are the advantages of accounting. 

• Accounting helps maintain organized documentation of a large number of monetary transactions. 

• Accounting facilitates in determining the net profit or net loss by maintaining a record of all the transactions. 

• Accounting records help carry out the comparison of the results of business every year. 

• Accounting records facilitate in identifying and recognizing if frauds occurred in a business organization. 

• Accounting records help the organization to monitor its operations. 

To leverage your knowledge on Accountancy and transaction recording, download and refer to the NCERT Accountancy book Class 11 Solutions PDF from Vedantu. 

Debit and Credit Rules 

Debit and credit rules are the universal accounting conventions that are being accepted all over the world. The credit entries denote the sources of financing and the debit entries denote the uses of financing. 

Liability denotes the source of funds. Therefore, when liability increases it is being credited, and when it decreases it is being debited. Likewise, equity also denotes the source of funds. Therefore, it is also being credited for the increase and debited for the decrease. Assets denote the use of funds. So, when an asset increases, it is being debited and when it decreases, it is credited. Expense decreases the equity so an increase in expense is debited. Income increases equity, so an increase in income is credited. 

Vedantu provides more information on these topics in the NCERT Solutions for Class 11 Accountancy Chapter 3 Recording of Transactions 1. You can download and consult the PDF of Accountancy Class 11 Chapter 3 from Vedantu to learn more about Accountancy concepts. 

Solved Example

Show the accounting equation from the following transactions. 

• Commenced business with cash Rs. 50,000. 

• Sold goods to Raheem on credit (cost Rs.400) Rs. 500.

• Paid rent in advance Rs.500.

• Salary outstanding Rs.100. 

These topics are explained thoroughly in the NCERT accountancy book class 11 solutions chapter 3, and you can try solving the exercise questions on this topic and compare your answers with that of the NCERT Solutions to check if you have a profound understanding of these topics. Vedantu’s NCERT Accountancy book Class 11 Solutions PDF comes with a complete package of MCQs, practical examples, and theory. 

Fun Facts:

• Did you know that Bookkeeping is the only word in English that contains three sets of twofold letters consecutively?

• Bubblegum was created by an accountant, Walter Diemar in 1928. It was brilliant pink in shading since that was the main colour he needed to hand at that point.