Recording Of Transactions II – Complete Guide For Class 11 Accountancy Chapter 4

Our learning resources for the chapter, Recording Of Transactions II – Chapter 4 –  Accountancy for Class 11th are designed to ensure that you grasp this concept with clarity and perfection. Whether you’re studying for an upcoming exam or strengthening your concepts, our engaging animated videos, practice questions and notes offer you the best of integrated learning with interesting explanations and examples. 

When it comes to recording transactions in a business, it’s essential to understand the different books involved, especially as the business grows. Let’s dive into the concept of Books of Original Entry and their importance.

Books of Original Entry – Recording Of Transactions II

According to the chapter Recording of Transactions II, Books of Original Entry are crucial for recording transactions based on their nature. These special-purpose books help maintain organized and categorized records. Let’s explore the different types of these books.

Special Purpose Subsidiary Books

Special Purpose Subsidiary Books

Cash Book

Sales Book

Sales Return Book

Purchases Book

Purchase Returns Book

Bills Receivable Book

Bills Payable Book

Journal Proper

Cash Book

The Cash Book is a vital record that tracks all cash receipts and payments in an organization. It’s used universally by almost all businesses. Let’s look at the different types of cash books.

Types of Cash Book

Types of Cash Book

Single Column Cash Book

Double Column Cash Book

Petty Cash Book

Single Column Cash Book

The Single Column Cash Book, discussed in Class 11 Accountancy Chapter 4 – Recording of Transactions II records all cash receipts and payments in chronological order. Here’s how it’s structured.

Format

Dr.	Cash Book	Cr.
Date	Particulars	L.F.

Features

• The opening balance of cash is written on the debit side
• All cash receipts are recorded on the debit side
• All cash payments are recorded on the credit side
• Non-cash transactions are not recorded in the cash book

So, those were the features of a Single Column Cash Book. Now, let’s see an example to understand its practical application.

Example

Recording of entries in the single-column cash book and its balancing:

Entries

Jan 01: Cash in hand – ₹30,000

Jan 04: Received cash from Gurmeet – ₹12,000

Jan 08: Insurance premium paid – ₹6,000

Jan 13: Purchased furniture for cash – ₹14,000

Jan 16: Sold goods for cash – ₹30,000

Jan 17: Purchased stationery – ₹2,000

Jan 20: Sold goods to Kamal for cash – ₹40,000

Jan 27: Paid monthly rent – ₹5,000

Jan 30: Deposited in bank – ₹20,000

Cash Book Format

Dr.	Cash Book	Cr.
Date	Particulars	L.F.
01/01	To Bal b/d
04/01	To Gurmeet
16/01	To Sales
20/01	To Sales
	Total

So, those were the basics of the Single Column Cash Book. Next, let’s explore the double-column cash Book and its utility in recording both cash and bank transactions.

Double Column Cash Book

The Double Column Cash Book records both cash and bank transactions, offering a comprehensive view of financial activities. Here’s how it is formatted and used.

Format

Dr.	Cash Book	Cr.
Date	Particulars	L.F.

Example

From the following details, prepare the Double Column Cash Book:

Entries

Jan 01: Cash in hand – ₹30,000, Cash at bank – ₹45,000

Jan 08: Insurance paid by cheque – ₹3,000

Jan 16: Cash Sales – ₹10,000

Jan 17: Cash withdrawn from bank for office use – ₹15,000

Jan 20: Deposited the cash into bank – ₹5,000

Jan 27: Cash withdrawn from bank for personal use – ₹2,000

Double Column Cash Book Format

In Class 11 Accountancy Chapter 4 – Recording of Transactions II, the Double Column Cash Book provides a comprehensive view of both cash and bank transactions.

Dr.	Cash Book	Cr.
Date	Particulars	L.F.
01/01	To Balance b/d
16/01	To Sales
17/01	To Bank (C)
20/01	To Cash (C)
	Total

So, that’s the Double Column Cash Book. Let’s move on to the concept of Contra Entries, which involve transactions affecting both cash and bank columns.

Contra Entry

Contra Entries, as detailed in Chapter – Recording of Transactions II, are essential for understanding transactions that affect both cash and bank columns. These are recorded on both sides of a cash book, such as when cash is deposited into the bank or withdrawn from the bank. Let’s see an example to understand this better.

Example

Transaction

Cash deposited into bank

Cash deposited into the bank

Discount Types

Understanding the different types of discounts, as explored in Chapter Recording of Transactions II, is key for accurate financial recording. Discounts are incentives provided in various forms. Understanding the types of discounts and their accounting treatment is essential for accurate financial records. Let’s explore the two main types of discounts: Trade Discounts and Cash Discounts.

Discount Types

Discount Types

Trade Discount

Cash Discount

Cash Discount

Cash discounts are offered to encourage prompt payment. These discounts are recorded in the books of account and come in two forms: Discount Allowed and Discount Received.

Petty Cash Book

The Petty Cash Book, covered in Chapter Recording of Transactions II, helps manage minor expenses effectively. The Petty Cash Book is used to record small, repetitive payments. This helps in managing and tracking minor expenses efficiently. Let’s take a look at its format and an example.

Format

Date

Receipts

Total

Date

Payments

Total

Printing & Stationery

Postage & Telegram

Other Subsidiary Books

There are several other subsidiary books used for specific purposes. Let’s briefly discuss each of them.

Purchases Book

The Purchases Book records only credit purchases, excluding cash purchases and non-resale items. Here’s the format and an example.

Format

Date

Invoice no.

Particulars

L.F.

Details

Amount

Example

Transaction: Purchased from M/s Neema Electronics (invoice no. 3250) 20 mini size TVs @ ₹2,000 per piece, trade discount 20%.

Date	Invoice no.	Particulars	L.F.	Details	Amount
02/04/08	3250	M/s Neema Electronics		20 mini size TVs @ ₹2,000 each	₹40,000
				Less trade discount 20%	(₹8,000)
Purchases a/c…Dr				₹32,000

So, that was the Purchases Book. Next, let’s look at the Sales Book and its format.

Sales Book

The Sales Book records from the chapter Recording Of Transactions II only credit sales of goods. Sales of fixed assets and cash sales are recorded in other books. Here’s its format and an example.

Format

Date

Invoice no.

Particulars

L.F.

Details

Amount

Example

Transaction: Sold to M/s Rohan Bros (invoice no. 1469) 10 washing machines @ ₹3,000 per piece, trade discount 10%.

Date	Invoice no.	Particulars	L.F.	Details	Amount
02/04/08	1469	M/s Rohan Bros		10 washing machines @ ₹3,000 each	₹30,000
				Less trade discount 10%	(₹3,000)
Sales a/c…Cr				₹27,000

So, those were the Sales and Purchases of Books. Next, let’s explore Sales Returns and Purchase Returns Books, and their significance.

Sales Return Book

The Sales Return Book from the chapter Recording of Transactions II records goods returned by customers. Here’s its format and an example.

Format

Date

Debit Note no.

Customer’s Name

L.F.

Details

Amount

Example

Transaction: Returned by M/s Rohan Bros (Debit Note no. 1469) 1 washing machine.

Date	Debit Note no.	Customer’s Name	L.F.	Details	Amount
02/04/08	1469	M/s Rohan Bros		1 washing machine @ ₹3,000 each	₹3,000
Sales Return a/c…Dr				₹3,000

Next, let’s look at the Purchases Return Book and its format.

Purchase Return Book

The Purchases Return Book from the chapter Recording Of Transactions II records goods returned to suppliers. Here’s its format and an example.

Format

Date

Credit Note no.

Supplier’s Name

L.F.

Details

Amount

Example

Transaction: Returned to M/s Neema Electronics (Credit Note no. 3250) 1 mini-size TV @ ₹2,000 each.

Date	Credit Note no.	Supplier’s Name	L.F.	Details	Amount
02/04/08	3250	M/s Neema Electronics		1 mini size TV @ ₹2,000 each	₹2,000
Purchases Return a/c…Cr				₹2,000

So, those were the Sales Return and Purchase Return Books from the chapter Recording of Transactions II. Now, let’s discuss other key subsidiary books and their purposes.

Other Key Subsidiary Books

From the chapter recording of Transactions II, here are some more subsidiary books you should be familiar with:

Sales Book

• Records all credit sales of goods

Sales Return Book

• Records of return of goods by customers

Purchases Book

• Records all credit purchases of goods

Purchase Return Book

• Records of return of goods to suppliers

Bills Receivable Book

• Records details of bills receivable

Bills Payable Book

• Records details of bills payable

Journal Proper

• Records transactions that do not fit in any other book

Debit Note

• Prepared by the buyer when returning goods to the seller, and the seller’s account is debited with the amount of goods returned

Credit Note

• Prepared by the seller to inform the buyer that their account has been credited for goods returned by them

Cash Book

• Record of cash and bank transactions

Petty Cash Book

• Maintained to record of small payments

Trade Discount

• Reduction in catalog price to promote sales, not recorded in the books of account

Cash Discount

• Reduction allowed to encourage prompt payment, recorded in the books of account

So, those were the essential types of subsidiary books. Understanding these will give you a solid foundation for recording and managing business transactions efficiently.

In conclusion, Class 11 Accountancy Chapter 4 – Recording of Transactions II equips students with a comprehensive understanding of recording transactions and maintaining financial records. This chapter delves deeply into the Books of Original Entry, including the Cash Book, Double Column Cash Book, and various subsidiary books such as the Purchases Book and Sales Book.

By mastering these concepts, you will gain valuable insights into organizing and categorizing financial transactions, ensuring accurate and efficient record-keeping. The engaging resources provided, including animated videos, practice questions, and detailed notes, are designed to enhance your grasp of Class 11 Accountancy Chapter 4 – Recording of Transactions II and prepare you for both exams and real-world applications.

Remember, Class 11 Accountancy Chapter 4 – Recording of Transactions II is crucial for building a solid foundation in accounting principles. Embrace the learning materials and examples to become proficient in recording transactions, as this knowledge will serve you well throughout your academic journey and future career.