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How to Journalise? Video Lecture | Accountancy Class 11 - Commerce

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FAQs on How to Journalise? Video Lecture - Accountancy Class 11 - Commerce

1. How to journalize transactions?
Ans. Journalizing transactions involves recording them in a journal, which is a chronological record of all financial transactions. To journalize a transaction, follow these steps: 1. Identify the accounts affected by the transaction. 2. Determine the type of account (asset, liability, equity, revenue, or expense) for each affected account. 3. Decide whether the account should be debited or credited based on the rules of double-entry accounting. 4. Record the transaction in the journal by entering the date, accounts debited, accounts credited, and the corresponding amounts.
2. What is the purpose of journalizing?
Ans. The purpose of journalizing is to provide a detailed and chronological record of all financial transactions. By journalizing, businesses can: - Maintain an accurate record of all transactions for future reference and auditing purposes. - Track the flow of money and financial activities within the organization. - Analyze and evaluate the financial performance of the business. - Prepare accurate financial statements and reports.
3. Can you provide an example of journalizing a transaction?
Ans. Certainly! Let's consider a simple transaction: On January 1st, a business owner invests $10,000 cash into their business as capital. - The accounts affected are Cash (an asset) and Capital (an equity account). - Cash is debited with $10,000 since it increases. - Capital is credited with $10,000 since it represents the owner's investment. - The journal entry would be: Date Account Debit Credit Jan 1 Cash $10,000 Capital $10,000
4. Are there any specific rules to follow while journalizing transactions?
Ans. Yes, there are specific rules called the rules of debit and credit. These rules guide the process of journalizing transactions: - Assets and expenses increase with debits and decrease with credits. - Liabilities, equity, and revenue increase with credits and decrease with debits. - Every transaction must have at least one debit and one credit. - The total debits must equal the total credits in a journal entry, ensuring the equation: Debits = Credits.
5. What are the different types of journals used for journalizing?
Ans. There are several types of journals used for journalizing, including: - General Journal: Records all types of transactions not recorded in specialized journals. - Sales Journal: Records all sales transactions. - Purchase Journal: Records all purchases of goods or services. - Cash Receipts Journal: Records all cash received. - Cash Disbursements Journal: Records all cash payments. - General Ledger: Summarizes all journal entries and serves as a central record-keeping system for accounts.
82 videos|105 docs|42 tests

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