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Recording of Business transactions
Last Updated On: 07-Nov-2021Posted On: 07-Nov-2021
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There are several steps that students need to follow to prepare books of accounting – ledger or journal. It is essential to learn the components that constitute a financial transaction and distinguish it from other events in business.
Students can go through our step-by-step Accountancy Class 11 Chapter 1 Notes to have a firm idea of these components.
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Identification
It is quintessential when keeping books to identify the events which qualify as a financial transaction and is entailed by monetary figure. It forms the basis of a student’s knowledge of such financial events that go in the books. Students can refer to our Financial Accounting Notes to get an idea of how the identification process takes place.
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Recording
Once students have identified the financial transactions, these will be recorded in the books. These economic events are to be recorded in a chronological sequence for proper recording. Students can learn of the various methods of recording and the process it involves in our Bookkeeping and Accountancy 11th notes.
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Classification
Students need to classify the financial events accurately they record and create separate heads or accounts to record them properly. It is one of the most essential tasks involved in accounting. Students can learn it in more detail in our Accounts Ch. 1 Class 11 notes to develop a better idea.
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Summarise
It is the process of tallying the financial events and computing a balance between these events. It concludes the validity of such transactions.