This a MCQ (Multiple Choice Question) based practice test of Chapter 1- Introduction to Accountingof Accountancy of Class XI (11) for the quick revision/preparation of School Board examinationsQ What type of transactions we record in the books of accounts?a)Political natureb)Social naturec)Financial natured)Cash natureCorrect answer is option 'C'. Can you explain this answer?

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of course.....financial transactions....as in accounts....aaccording to its principle ...only transaction relate..to monetary....gain are recorded....hope u undrstand..

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yes c is correct as due to money measurement concept only those transactions are recorded. in books of accounts which r of financial nature or can b calculated in terms of money

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Political nature

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C) financial nature

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Type of transactions recorded in the books of accounts

Transactions recorded in the books of accounts are of various types, but they are primarily of a financial nature. These transactions involve the exchange of economic resources or assets between entities. Let's discuss in detail the types of transactions recorded in the books of accounts:

1. Cash transactions: These are transactions in which payment is made or received in the form of cash. Examples include payment of wages, receipt of cash from sales, cash purchase of inventory, etc.

2. Credit transactions: These transactions involve the extension of credit to customers or suppliers, where payment is made or received at a later date. Examples include sales on credit, purchases on credit, etc.

3. Investment transactions: These transactions involve the purchase or sale of long-term assets such as land, buildings, machinery, etc. These transactions are recorded in the books to determine the value of investments and to calculate the profit or loss on their sale.

4. Borrowing and lending transactions: These transactions involve borrowing funds from creditors or lending funds to debtors. Examples include taking a loan from a bank, issuing bonds to raise funds, lending money to individuals or businesses, etc.

5. Expense transactions: These transactions involve the incurrence of expenses for running the business. Examples include payment of salaries, rent, utilities, etc.

6. Revenue transactions: These transactions involve the generation of income from the sale of goods or services. Examples include sales revenue, rental income, commission income, etc.

7. Adjusting transactions: These transactions are recorded at the end of an accounting period to adjust certain accounts and ensure accurate financial reporting. Examples include depreciation, accruals, prepayments, etc.

8. Non-monetary transactions: These transactions do not involve the exchange of cash or cash equivalents. Examples include barter transactions, exchange of goods or services, etc.

In conclusion, the transactions recorded in the books of accounts are primarily of a financial nature. They involve the exchange of economic resources, cash, credit, investments, borrowing and lending, expenses, revenues, adjusting entries, and sometimes non-monetary transactions.

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