Page 66 - DCOM101_FINANCIAL_ACCOUNTING_I

Financial Accounting-I

Notes Solution

Opening Journal Entries

Dr. Cr.
Date Particulars L.F. ` `
1.1.2006 Cash in hand a/c Dr. 3,000
Cash at Bank a/c Dr. 16,000
Stock in trade a/c Dr. 30,000
Furniture’s Fittings a/c Dr. 5,000
Sundry debtors a/c Dr. 21,000
To Sundry creditors a/c 18,000
To Ganesh & Co. a/c 9,000
To Capital a/c 48,000
Opening entry in respect of assets and liabilities. (Difference
between Assets and liabilities is equal to capital)

6.6 Summary

z Journal is the first book of the original entries in which all the business transactions of the

financial nature are recorded, then posted to ledger accounts.

z Accounts are of three types – Personal, Real and Nominal Account.
z The law of entire business revolves around only on mutual agreement sharing policy
among the players.
z A personal account is an account which deals with a due balance either to or from these
individuals on a particular period.
z Real Accounts is the account especially deals with the movement of assets.

z Nominal Account is an account deals with the amount of expenses incurred or incomes
earned.
z It includes all expenses and losses as well as incomes and gains of the enterprise.

6.7 Keywords

Journal: The primary book in which the business transactions are recorded at fi rst time.
Nominal A/c: Accounts which are relating to the revenues, incomes, expenses and losses of the
business are called nominal accounts.

Personal A/c: Accounts which are related to person, firms, companies and representatives.

Process of Accounting: It includes the recording of transactions into Journal, classifying into
Ledger and summarizing into Trial Balance and Final Accounts.
Real A/c: Accounts which are related to all the assets accounts are included into it.

6.8 Self Assessment

Fill in the blanks:
1. Journalising is the process of entering transactions in .....................
2. Another name for Journal is .....................
3. Transactions, when recorded in Journal, are known as .....................

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