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Basic Accounting Terms - Business Transactions & Accounts : Class 11 Video Lecture - Commerce

FAQs on Basic Accounting Terms - Business Transactions & Accounts : Class 11 Video Lecture - Commerce

1. What is a business transaction in accounting?

Ans. A business transaction in accounting refers to any financial activity or event that affects a company's financial position and can be measured reliably. It involves the exchange of goods, services, or money between the company and external parties, such as customers, suppliers, or lenders.

2. What are accounts in accounting?

Ans. In accounting, accounts refer to the records that are used to classify and track the financial transactions of a business. Each account represents a specific type of asset, liability, equity, revenue, or expense. Examples of accounts include cash, accounts receivable, accounts payable, inventory, and retained earnings.

3. How are business transactions recorded in accounting?

Ans. Business transactions are recorded in accounting through a process called bookkeeping. The transaction details are first analyzed to determine which accounts are affected and how they are impacted. Then, the double-entry bookkeeping system is used to record the transaction by debiting one or more accounts and crediting another account(s) in equal amounts.

4. What is the purpose of classifying business transactions in accounting?

Ans. The purpose of classifying business transactions in accounting is to organize and summarize the financial information of a business. By classifying transactions into different accounts, it becomes easier to track and analyze the company's financial performance, identify areas of improvement or concern, and generate accurate financial statements for decision-making purposes.

5. Can you give examples of business transactions and the corresponding accounts in accounting?

Ans. Yes, here are some examples of business transactions and their corresponding accounts in accounting: - Sale of goods to a customer: Accounts receivable (debit) and sales revenue (credit) - Purchase of inventory from a supplier: Inventory (debit) and accounts payable (credit) - Payment of utility bills: Utilities expense (debit) and cash (credit) - Taking out a loan from a bank: Cash (debit) and long-term loan (credit) - Owner investment in the business: Cash (debit) and owner's equity (credit)

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Feb 19, 2025 Last updated

Basic Accounting Terms - Business Transactions & Accounts : Class 11 for Commerce2025 is part of Commerce preparation. The notes and questions for Basic Accounting Terms - Business Transactions & Accounts : Class 11 have been prepared according to the Commerce exam syllabus. Information about Basic Accounting Terms - Business Transactions & Accounts : Class 11 covers all important topics for Commerce2025 Exam. Find important definitions, questions, notes, meanings, examples, exercises and tests below for Basic Accounting Terms - Business Transactions & Accounts : Class 11.

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