The document provides an introduction to accounting and the accounting equation. It discusses how accounting transactions are recorded in journals using double-entry bookkeeping. Specifically, it presents 4 transactions as examples of journal entries where debits and credits are equal. It also explains the accounting equation Assets = Liabilities + Owners Equity and shows how the equation is balanced through 3 example transactions. Finally, it provides an overview of the accounting cycle including journals, ledgers, trial balance, and final accounts.

1. INTRODUCTION
TO ACCOUNTING
Submitted to:- Presented by:-
DR. SUNIL Ashish
punia
MBA – 1ST
YEAR

2. RECORDING OF ACCOUNTING TRANSACTIONS
INTRODUCTION
 The general Ledger contains all entries from both the general Journal and the special
 Using a double entry system to record the transactions keeps the accounts balance.
 The accounting requirement that each transaction be recorded by an entry that has equal
debits and credits is called double entry procedure.

3. ACCOUNTING TRANSACTIONS
 An accounting transaction is a business event having a monetary impact on the
financial statements of a business.
 It is recorded in the accounting records of the business.
 Examples of accounting transaction are as follows:-
1) Purchase fixed assets from supplier
2) sale on credit to the customer
3) in cash to a customer

4. ACCOUTING EQUATION
 The equation is the foundation of double entry accounting
 The balance sheet is a complex display of this equation , showing that the total
of Assets of a company are equal to the total of Liabilities and shareholders
equity.
ASSETS = LIABILITIES + OWNERS FUND

5. TRANSACTION ANALYSIS
Transaction 1:- started business with cash 50,000
Transaction 2:- received a payment of 20,000 in cash
Transaction 3:- rent paid 10,000

6. ASSETS = LIABILITIES + OWNERS FUND
CASH COMMON STOCK + RETAINED EARNINGS
1) 50,000 50,000
50,000 50,000
2) +20,000 +20,000
70,000 50,000 + 20,000
3) (10,000) (10,000)
60,000 50,000 + 10,000
{60,000} {60,000}

7. DOUBLE ENTRY SYSTEM
 The double entry system of bookkeeping or accounting means every business
transaction will involve two changes in financial statement.
 An Italian locus pacioli wrote a first book on double entry system in the year 1494.
processes in the double entry system
1) JOURNAL
2) LEDGER
3) TRIAL BALANCE
4) FINAL ACCOUNTS

8.  JOURNAL:- it is derived from French word “ jour” means day. A daily record of transactions . it is also
called book of original entry.
 LEDGER :- The book in which accounts are maintained is called ledger . These are of two types:-
- standard form
- self balancing form
 TRIAL BALANCE :- It may be defined as an informal accounting schedule that lists the ledger account
balances at a point in time compares the total of debit balance and credit balance.it can be said as a
summary statement.
 FINAL ACCOUNTS :- it gives an idea about the profitability and financial position of a business to its
management , owners , and other interested parties .

9. JOURNAL FORMAT
DATE PARTICULARS L/F DEBIT CREDIT
Accounts to be debited …………………………….Dr
to accounts to be credited
( narration)
*******
******

10.  Transaction 1:- purchased goods of 25,000
 Transaction 2:- purchase furniture from xyz ltd for 30,000
 Transaction 3:- sale of machinery for 80,000
 Transaction 4:- commission received 45,000

11. JOURNAL ENTRIES
DATE PARTICULARS L/F DEBIT CREDIT
1)
2)
Purchase A/C ………………………………………………………… Dr
To cash A/C
(Being , goods purchased for 25,000)
purchase A/C ……………………………………………………….... Dr
To xyz ltd A/C
(Being , goods purchased from xyz ltd on credit )
25,000
30,000
25,000
30,000

12. DATE PARTICULARS L/F DEBIT CREDIT
3)
4)
cash A/C ………………………………………………….. Dr
To machinery A/C
(Being , sale of machinery for cash 80,000)
cash A/C ………………………………………………........ Dr
To commission A/C
( Being , commission received )
80,000
45,000
80,000
45,000

13. CASH A/C
DATE PARTICULARS AMOUNT DATE PARTICULARS AMOUNT
1)
2)
To machinery A/C
To commission A/C
80,000
45,000
1,25,000
By purchase A/C
By balance c/d
25,000
1,00,000
1,25,000

14. PURCHASE A/C
DATE PARTICULARS AMOUNT DATE PARTICULARS AMOUNT
1)
2)
To cash A/C
To xyz ltd A/C
25,000
30,000
55,000
By balance c/d 55,000
55,000

15. XYZ LTD A/C
DATE PARTICULARS AMOUNT DATE PARTICULARS AMOUNT
To balance c/d 30,000
30,000
1) By purchase A/C 30,000
30,000

16. MACHINERY A/C
DATE PARTICULARS AMOUNT DATE PARTICULARS AMOUNT
To balance c/d 80,000
80,000
1) By cash A/C 80,000
80,000

17. COMMISSION A/C
DATE PARTICULARS AMOUNT DATE PARTICULARS AMOUNT
To balance c/d 45,000
45,000
1) By cash A/C 45,000
45,000

18. TRIAL BALANCE
S.NO. PARTICULARS DEBIT CREDIT
1)
2)
3)
4)
5)
Cash A/C
Purchase A/C
xyz ltd A/C
Machinery A/C
Commission A/C
1,00,000
55,000
1,55,000
30,000
80,000
45,000
1,55,000