Page 23 - DMGT403_ACCOUNTING_FOR_MANAGERS

Accounting for Managers Gopika Juneja, Lovely Professional University

Notes Unit 2: Recording of Transactions

CONTENTS
Objectives
Introduction

2.1 Classification of Accounts
2.2 Personal Account
2.3 Real Account

2.4 Nominal Accounts
2.5 Journalizing Transactions
2.6 Journal Entries in between the Accounts of Two Different Categories
2.7 Ledger Posting
2.8 Trial Balance

2.9 Summary
2.10 Keywords
2.11 Self Assessment

2.12 Review Questions
2.13 Further Readings

Objectives

After studying this unit, you will be able to:
Illustrate the Journalizing Transactions
Prepare ledger Posting and Trial balance

Introduction

In the last unit, you learnt about the basic concepts of accounting. The unit discussed about the
concept of accounting, principles of accounting and different branches of accounting.
In the present unit, you will study about the recording of accounting transactions. The unit
covers the key aspects of accounting like types of accounting system, journal, ledger and balancing
the accounts. Recording of accounting transactions is a process which generally includes five
steps. The sequence of five steps in recording and reporting transactions is as follows:

As discussed earlier accounting is the art of recording, classifying and summarizing the business
transactions of the financial nature. Under the recording process of accounting journal and
subsidiary books are maintained, under classification of transactions the ledger is maintained

18 LOVELY PROFESSIONAL UNIVERSITY