PPT: Recording of Transactions - I | Accountancy Class 11 - Commerce PDF Download

 Page 1


Recording of 
Transactions - I
Page 2


Recording of 
Transactions - I
Overview
Accounting Process
Accounting involves identifying 
and analysing business 
transactions, recording them, 
classifying and summarising their 
effects, and communicating this 
information to interested users.
Chapter Focus
This chapter details each step in 
the accounting process, beginning 
with transaction identification and 
source document preparation.
Key Components
We'll explore how transactions are 
recorded in the journal (book of 
original entry) and then posted to 
individual accounts in the ledger 
(principal book).
Page 3


Recording of 
Transactions - I
Overview
Accounting Process
Accounting involves identifying 
and analysing business 
transactions, recording them, 
classifying and summarising their 
effects, and communicating this 
information to interested users.
Chapter Focus
This chapter details each step in 
the accounting process, beginning 
with transaction identification and 
source document preparation.
Key Components
We'll explore how transactions are 
recorded in the journal (book of 
original entry) and then posted to 
individual accounts in the ledger 
(principal book).
Business Transactions and Source Document
What is a Business Transaction?
A business transaction involves 
reciprocal exchange between parties 
with two-fold effects. For example, 
purchasing a computer for £35,000 
involves giving cash and taking delivery 
of a computer.
Source Documents
These provide evidence of transactions 
and include cash memos, invoices, 
sales bills, pay-in-slips, cheques, and 
salary slips. When no document exists 
(e.g., petty expenses), a voucher is 
prepared and approved.
Document Management
All vouchers are arranged 
chronologically, serially numbered, and 
kept in a separate file. All accounting 
records are based on these vouchers.
Page 4


Recording of 
Transactions - I
Overview
Accounting Process
Accounting involves identifying 
and analysing business 
transactions, recording them, 
classifying and summarising their 
effects, and communicating this 
information to interested users.
Chapter Focus
This chapter details each step in 
the accounting process, beginning 
with transaction identification and 
source document preparation.
Key Components
We'll explore how transactions are 
recorded in the journal (book of 
original entry) and then posted to 
individual accounts in the ledger 
(principal book).
Business Transactions and Source Document
What is a Business Transaction?
A business transaction involves 
reciprocal exchange between parties 
with two-fold effects. For example, 
purchasing a computer for £35,000 
involves giving cash and taking delivery 
of a computer.
Source Documents
These provide evidence of transactions 
and include cash memos, invoices, 
sales bills, pay-in-slips, cheques, and 
salary slips. When no document exists 
(e.g., petty expenses), a voucher is 
prepared and approved.
Document Management
All vouchers are arranged 
chronologically, serially numbered, and 
kept in a separate file. All accounting 
records are based on these vouchers.
Preparation of Accounting 
Vouchers
Types of Vouchers
Accounting vouchers 
may be classified as 
cash vouchers, debit 
vouchers, credit 
vouchers, and journal 
vouchers. There is no 
set format, but they 
must be preserved 
until audit and tax 
assessments are 
completed.
Transaction Voucher
Records a simple 
transaction with one 
debit and one credit. 
The format is shown in 
figure 3.1 in the 
original document.
Compound & 
Complex Vouchers
Compound vouchers 
record transactions 
with multiple 
debits/credits and 
one credit/debit. 
Complex vouchers 
(Journal Vouchers) 
handle transactions 
with multiple debits 
and multiple credits.
Page 5


Recording of 
Transactions - I
Overview
Accounting Process
Accounting involves identifying 
and analysing business 
transactions, recording them, 
classifying and summarising their 
effects, and communicating this 
information to interested users.
Chapter Focus
This chapter details each step in 
the accounting process, beginning 
with transaction identification and 
source document preparation.
Key Components
We'll explore how transactions are 
recorded in the journal (book of 
original entry) and then posted to 
individual accounts in the ledger 
(principal book).
Business Transactions and Source Document
What is a Business Transaction?
A business transaction involves 
reciprocal exchange between parties 
with two-fold effects. For example, 
purchasing a computer for £35,000 
involves giving cash and taking delivery 
of a computer.
Source Documents
These provide evidence of transactions 
and include cash memos, invoices, 
sales bills, pay-in-slips, cheques, and 
salary slips. When no document exists 
(e.g., petty expenses), a voucher is 
prepared and approved.
Document Management
All vouchers are arranged 
chronologically, serially numbered, and 
kept in a separate file. All accounting 
records are based on these vouchers.
Preparation of Accounting 
Vouchers
Types of Vouchers
Accounting vouchers 
may be classified as 
cash vouchers, debit 
vouchers, credit 
vouchers, and journal 
vouchers. There is no 
set format, but they 
must be preserved 
until audit and tax 
assessments are 
completed.
Transaction Voucher
Records a simple 
transaction with one 
debit and one credit. 
The format is shown in 
figure 3.1 in the 
original document.
Compound & 
Complex Vouchers
Compound vouchers 
record transactions 
with multiple 
debits/credits and 
one credit/debit. 
Complex vouchers 
(Journal Vouchers) 
handle transactions 
with multiple debits 
and multiple credits.
Design of Vouchers
Design Elements
The design depends on 
the nature, requirements, 
and convenience of the 
business. Different colour 
papers and printing fonts 
are used to distinguish 
various vouchers.
Essential Components
A good quality paper with 
the firm's name printed on 
top, transaction date, 
serial voucher number, 
names of accounts to be 
debited or credited, and 
transaction description 
are required.
Authentication
The voucher must include the name and signature of both the 
preparer and the authorised person to ensure proper 
accountability and control.