BCOM 1st Year Accounting Transactions And All Entry Question Answer Notes

BCOM 1st Year Accounting Transactions And All Entry Question Answer Notes : Accounting Transaction, Accounting cycle; journal, Rules of debit and credit, compound journal entry; Opening entry, relationship between journal and ledger, Rules regarding posting, Trial balance, Sub-division of journal. Notes Study Material Sample Model Practice Papers Examination Papers Unit Wise Chapter Wise Topic Wise Syllabus of The Content. This Website parultech.com is Very useful for every Students B.A, B.SC, B.Com, M.A, M.Com

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Section B

LONG ANSWER QUESTIONS

Q.1. Give the classification of accounts. Also explain the rules of debit and credit.

Or What are the types of accounts? Explain with illustrations.

Ans Classification of Accounts: In order to keep a proper record of the two aspects of a transaction, i.e. debit and credit, accounts may be classified as shown below:

Personal Accounts Study Notes Entry’s

Personal accounts are those which are opened under the name of individual, firm, institution, etc. e.g. Dinesh A/C, Sharma Bros. A/C, DAV College A/C, SBI account, Proprietor capital account, etc. 

Types: Personal accounts can be classified into following three categories: 

1. Natural Account: The term natural person means who are creation of God. 

e.g. Sanjay A/C, Upasana A/c, Prashi A/c, etc.

2. Artificial Account: These accounts include account of corporate bodies or institutions which are recognised as persons in business dealing.

e.g. Accounts of Limited Company, DAV College A/c, Banking Company A/C, etc.

3. Representative Personal Account: These are accounts which represent a certain group of person.

e.g. Outstanding wages A/c, Prepaid salary A/c. 

Rules: These are as follows:

(a) Debit the receiver.

(b) Credit the giver.

Impersonal Accounts

All those accounts which are not personal accounts are termed as impersonal accounts. These accounts may be related to assets, losses, expense, income and gain. In other words, impersonal account may be classified as real and nominal accounts.

1. Real Accounts: Real accounts are those which are related to assets. 

e.g. Cash A/c, Building A/c, Furniture A/c, etc. 

Types: Real accounts are classified as:

(a) Tangible Real Account: These are those A/cs which relate to such things which can be seen or touched.

e.g. Building, Land, Cash, Stock, etc. It should be noted that Bank A/c is personal A/c.

(b) Intangible Real Account: The A/cs which cannot be seen or touched but can be felt and it can be purchased and sold out just like other assets.

e.g. Goodwill A/C, Trademarks A/c, Patents A/c. Rules: 

(i) Debit what comes in.

(ii) Credit what goes out. 

2. Nominal Accounts: Nominal accounts are those which are related to expenses and losses such as rent paid, salary paid or which are related to income and gain such as interest, discount, commission received. Rules: (a) Debit all expenses and losses.

(b) Credit all incomes and gains. 

Q.2. Define ledger. Explain the rules regarding posting of transaction into ledger.

Ans. Ledger: As we know, all transactions are first recorded in the journal. These transactions are related to particular person, assets, expense or income and are recorded at different places in the journal as they occur on different dates. Hence, journal fails to bring all the transactions in one place together. To get the information, classification of the recorded transaction in journal is done through the ledger.

Thus ledger is a collection of requisite information concerning a particular account and presenting them under one head is known as ledger posting.

‘An account is a ledger record in a summarised form of all the transactions that have taken place with the particular person or things specified’.

–Carter ‘The book which contains a classified and permanent record of all the transactions of a business is called the ledger’.

Each ledger A/c is divided into two equal parts by two lines drawn closely in the centre. The left hand side is called Dr. (Debit) side and right hand side is called Cr. (Credit) side. The ledger has following columns:

1. Date: The date of the transaction is recorded in this column.

2. Particulars: Each transaction affects two accounts. The name of the other account which is affected by the transaction is recorded in this column.

3. Journal Folio (J.F.): The page number of the journal or subsidiary book from which the entry has been transferred is recorded in this column.

4. Amount: The amount pertaining to this A/c is written in this column. Rules of Posting

The record of transaction in the journal is called entry while the process of transferring an entry from the journal into ledger is called posting. The following rules should be considered:

1. Separate A/cs should be opened in the ledger for posting of transactions relating to different – accounts recorded in the journal, e.g. Deepak’s A/C, Sales A/C, Salary A/C, etc. 

2. All transactions relating to particular A/c should be posted at one place. In other words, an account is opened only once in the ledger. 

3. In a particular column, the word ‘to’ is used with the A/cs which appear on the debit side of the ledger A/c while the word ‘by’ is used with accounts which appear on the credit side of the ledger A/cs. 

4. The concerned account which has been debited in the journal should also be debited in the ledger but in particulars column, a reference should be made of the other account which has

been credited in the journal with concerned account. 

5. The concerned amount which has been credited in the journal should also be credited in the ledger but in the particulars column, a reference should be made of the other account which has been credited in the journal with concerned account. 

6. Same amount will be written in debit and credit column of amount from journal. 

Q.3. Define trial balance. How is it prepared?

Ans. Trial balance is a statement, prepared with the debit and credit balances of ledger accounts to test the arithmetical accuracy of the books. It may also be prepared with the debit and credit total of ledger accounts and also with the balances and total of ledger accounts.

Special Features of Trial Balance Entry’s

Trial balance has following features: 

1. The trial balance is prepared on a specific date. This is why, we use This is why, we use the word as on ……… with its heading. 

2. Trial balance contains the list of all ledger accounts including cash accounts 

3. Trial balance may be prepared with balances or total or balances and total of ledger accounts. 

4 The total of the Dr. and Cr. column of the amount must be equal.

5. In case, Dr. and Cr. side of the trial balance are equal, we assume that the system and the assumption of accounting equation have been observed.

6. The difference between Dr. difference between Dr. and Cr. side of trial balance point out that certain mistakes have been committed somewhere.