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Unit 2: Recording of Transactions




               Ledger is nothing but preliminary book of accounting transactions at which, each account  Notes
               is separately maintained through the allotment of various pages for exclusive recording.

               Posting is the process of selecting of transactions from Journal on the basis of accounts and
               writing them into ledger accounts.

          2.10 Keywords

          Bill of Exchange: A bill of exchange is an unconditional order signed by the maker which directs
          the recipient to pay a fixed sum of money to a third party at a future date.
          Golden Rules: These are fundamental rules for the entry of recording the financial transactions
          in accordance with the duality concept.

          Journal: The primary book in which the business transactions are recorded at first time.
          Ledger: It is the classification of accounts in which various accounts are maintained.
          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.

          2.11 Self Assessment

          Fill in the blanks:

          1.   Capital is a ……………………
          2.   Drawings are a ……………………
          3.   Furniture is a ……………………
          4.   State Bank of India is a ……………………

          5.   Rent paid is a ……………………
          6.   Journal is a ………………… of original entries for accounting data.
          7.   The journal is known as the ………………… .
          8.   The  process  of  transferring  the  entries  from  Journal  to  Ledger  accounts  is  called
               ………………
          9.   ……………… is a statement which shows balances of all accounts on a particular date.
          10.  The balances of all the liabilities and capital accounts are recorded in the ……………… of
               the Trial Balance.
          11.  The balances of all incomes and gains are disclosed in the ……………… of the Trial Balance.













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