This document provides an overview of recording transactions in bookkeeping. It discusses the double entry bookkeeping system where every transaction has two aspects - a debit and a credit. The key books of original entry are the journal, cash book, and other specialized day books. The journal records transactions with details of the date, narration of the event, account debited/credited, and amount. Ledger accounts are then posted from the journal and cash book. Ledger accounts are balanced periodically to determine profits or losses. Maintaining accurate accounting records through double entry bookkeeping allows businesses to track financial activities over time.

1. Recording of Transaction
Assistant professor -Mr. Swapnil S. Patil
M. Pharm (Pharmaceutics)
Drug Store Business Management

2. Contents
 Introduction
 Book keeping
 Double entry book keeping system
 Principle
 Types of account
 Books of original entry
 Journal
 Ledger

3. Introduction
 An external event that affects assets,
liabilities or capital is called a ‘transaction’.
 The documents on the basis of which entries are
recorded in the books of account are known as source
document.eg. Vouchers, invoice, bills, cash memos etc.
 These document provide information about the nature
of the transaction and the amount involved in it.

4. Book keeping
 Book keeping is defined as the science and
art of systematically and correctly recording
of all transactions which involve the transfer of money
or money’s worth.
 The systematic book keeping enables us to find out
accurately the result of business transactions during a
particular period.

5. Double entry book keeping system
 The double entry book keeping system is based on the
principle that every transaction has two fold aspects, a
giving aspect and a receiving aspects.
 Both the aspects must be recorded in the books of the
both parties.
1) Left hand side known as ‘Debit side’ denoted by ‘Dr’
2) Right hand side known as ‘Credit side’ denoted by ‘Cr’

6.  Principle- basic principle are-
1) The receiver is debited with the monetary value of
whatever he receives.
2) The giver is credited with the monetary value of
whatever he gives.
3) Every debit requires a credit and vice versa.

7. Types of account
 Three types account
1) Personal Account
2) Real account
3) Nominal account

8. Books of original account
 The following are the main books of original entry-
1) Journal
2) Cash book
a)Simple cash book
b) Two columnar cash book
c) Three columnar cash book
d) Petty cash book
3) Other day book
a) Purchase book
b) Sales book
c) Purchase return book
b) Sales returns book

9. Journal
 Format of journal
 Column (1) the date of transaction is entered.
 Column (2) a brief explanation of the transaction
called narration is given in the particulars column
 Column (3) the page no. of the ledger is given when a
transaction is posted to the ledger.
 Column (4) the amount to be debited to the account is
written close to the line in the particulars column.
 Column (5) the amount to be credited to the account is
written a few spaces away from the margin.
Date Particulars L.F. Debit Credit
Narration

10. Ledger
 A ledger account is divided into two sections by a
central vertical line.
1) The date on which a transaction is recorded
2) Particulars relating to a transaction
3) Page number of the book of original entry
4) The amount involved in the transaction.

11. - Posting of ledger from journal.
- Posting of ledger from cashbook
- Balancing of accounts

12. References
 R. M. Mehta, Drug store business management,
Vallabh Prakashan, fifth edition 2015( reprint), page
no. 168-207.
 V. N. Raje, Drug store business management, Nirali
Prakashan, edition, page no.