Revision Notes for CBSE Class 11 Accountancy Chapter-3 - Free PDF Download





















FAQs on Recording of Transactions - I Class 11 Notes CBSE Accountancy Chapter 3 (Free PDF Download)
1. What is a journal?
A journal is considered a detailed account used for recording all the financial transactions that take place in a business. These entries in the journal are used in future for reconciliation of accounts. The transaction information that is there in the journal is transferred to another official private account which is called a ledger account. A journal gives valuable information such as the date, time, amount and nature of the transaction. The transactions are recorded in the journal in a double-entry method. Single-entry bookkeeping is rarely used in journals. A journal can act as proof in the court of law.
2. What is a balance sheet?
A balance sheet is considered as a financial statement created to report information about the company's assets, liabilities and shareholders equity at a specific time. The information provided acts as a basis for determining rates of return and calculating the capital structure of the company. A balance sheet as a financial statement shows the viewers what the company owns and owes. It also shows the amount invested by the shareholders of the company. The balance sheet is just as important as other financial statements and is used alongside them. The balance sheets give the creditors of the company a detailed view of the financial strength of the company.
3. What is the traditional approach for the rules of Debit & Credit?
Under the traditional approach, the ledger accounts can mainly be classified into 2 categories:
Personal Accounts: Including all the accounts that are related to a person such as individuals, companies, firms, banks etc. This is further divided into 3 categories;
Natural Persons
Artificial Persons
Representative Persons
Impersonal Accounts: Including all the accounts that are unrelated to any person. This may be divided into;
Real Accounts
Nominal Accounts
4. What are the types of financial statements?
Financial statements usually consist of two statements. They are profit and loss statements and balance sheets, which are important for the external reporting as well as internal management needs. It is crucial to understand the flow of funds along with the changes in the financial position of a company. It's important to make a cash flow statement for such a purpose. All companies registered to the 2013 Company Law have to prepare their balance sheet, profit and loss statement, as well as account according to the procedure prescribed in the revised Annexure III of the Company Law. For more understanding of the subject, you can visit CBSE Class 11 Accountancy Chapter 3 Notes at Vedantu.
5. What is the purpose of posting J.F numbers that are entered in the journal at the time entries are posted to the accounts?
The numbers entered in the ledger whole posting entries into the Accounts are referred to as J.F Number. This helps to determine if transactions have been posted properly or not. This is recorded whenever a transaction is posted. The purpose behind posting J.F numbers in a ledger is to locate entries in a journal book and also to make sure that records have been kept in the books of the original entry.
6. Why is the evidence provided by source documents important to accounting?
The source documents in accounting are important because of the following reasons;
It gives evidence of the transaction that has occurred.
It works as the backup in times of auditing as well as tax assessment
It acts as the most important legal evidence.
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7. Are debits or credits listed first in journal entries? Are debits or credits indented?
Debit gets recorded in the journal first before credit, but both debits, as well as credit, have to be recorded in the journal prior to being recorded in the ledger. Entry for debit does not require any margin, indent or spacing. But for credit entries some margin, spacing, or indent is crucial. The symbol "Dr." is used for debit entry and is always right-aligned. For a detailed explanation, visit Vedantu for free of cost PDF of Class 11 Accountancy Chapter 3 Notes.