This GSEB Class 11 Commerce Accounts Notes Part 1 Chapter 4 Journal covers all the important topics and concepts as mentioned in the chapter.
Journal Class 11 GSEB Notes
For the numerous transactions of the business, which accounts are to be debited or which accounts are to be credited and how to decide that, we studied all this in the previous chapters. There are at least two effects of a each transaction : one on debit side and another on credit side. The amount by which one or more accounts are debited, with the same amount one or more accounts will be credited. In this chapter we want to study the process of systematic recording of business transactions in the journal, the basic book of accounts, after deciding which account will be debited by how much amount and which account will be credited by how much amount.
→ A recording process of accounting transaction based on rules of debit and credit in the first book of accounts is journal.
→ A journal is a fundamental or original book of Double Entry System.
→ Rough book which is also known as Tanchan or Tippan.
→ There are two types of discount :(1) Trade discount and (2) Cash discount.
→ Trade discount is not recorded in the books of accounts while cash discount is recorded in the books of accounts.
→ Generally, the purpose of given trade discount is that retailers can sell of goods at printed price only.
→ Cash discount is given so that customers can make their payment in or before time.
→ Sometimes businessman pays less amount or receives less amount at the time of final settlement. Whatever short amount is paid or received is known as allowance.
→ Advertisement Expense A/c is to be debited at the cost price of goods when goods is distributed as a free sample.
→ If personal expense of owner is paid from the business, Drawings A/c is debited.
→ Purchaser A/c will be debited when we paid amount of carriage on behalf of purchaser.
→ Drawings A/c will be debited, when Income tax is paid from the business, while Income tax refund is credited to Capital A/c.
→ Goods received as a free sample is not recorded.
→ If some expenses are paid on purchasing an asset, they are all added to the cost of the asset and so they are also debited to asset account, e. gM Brokerage is added in amount of investment at the time of investment in shares; Wages of installation of machine is added in price of machine.
→ When cash is withdrawn for office expenses from bank, cash balance of business is increased.
→ Bank charges is an expense, therefore, it is debited while Interest on bank balance is an income, therefore, it is credited.
→ If bank balance increased, then Bank A/c is debited and bank balance decreased, then Bank A/c is credited.
→ Interest on borrowed loan is an expense of business, while Interest on lent loan is an income of business.
→ Since bad debts is loss of business, it is debited to Bad Debts A/c while bad debts return is revenue of business, it is credited to Bad Debts Return A/c.
→ French word ‘Jour’ means day.
→ English word ‘Journal’ is originally of Latin language, which means a note or a diary.
→ On the basis of vouchers, accounting transactions are recorded in the journal book.
→ Narration provides information about transaction.
→ Ledger folio number is called as L.F. No.
→ Capital is a liability of business while Drawings is a receivable of business.
→ Two types of financial transactions are made with banks in business : (1) Cash transaction and (2) Non-cash transaction.
→ Interest on bank balance is an income of business while Interest on bank overdraft is an expense of business.
→ Bank charges is an expense of business while Bank charges refund is an income of business.
→ Cash discount is income as well as expense while trade discount is nothing any one.