In this post We will discuss about journal :
JOURNAL- The book in which transactions are writtren sysmatically for the first time ,these are known as journal. Second name of it is books of original entry.
Ledger- A Ledger contains classified summary of a business transactions pertaining to a given period.
Journalising- The process of writting transactions in journal , These are known as journalising.
Posting– Posting is the process of trasffering the entries from the books of original entries(journal) to the ledger. Cash Book is a ledger. we will discuss forward about it in details.
TrialBalance- A trial balance is a statement showing the balances or total of debits and credits of all the accounts with a view to verify the airthmetical accuracy of the posting in to the ledger.
Final statement- Before we make profit and loss than after we make balacesheet.
Try to answer these questions:
What is Journal?
2. What is Ledger?
3. WHAT IS Trial balance?
4.What is Final account?
5.What is Journing?
6. What is posting?
7.Cash book is a __.
8.What is Books of original entry?
NOW we will discuss about second rules of debit and credit.
What is the second rules of debit and credit? Uptill now, You have learned about golden rules of debit and credit . Second rules of Debit and Credit:
In captial, Debit side will decrease and Credit side will increase.
2. In Assets, Debit side will increase and credit side will decrease.
3.In liability, Debit side will decrease and credit side will increase.
4.In expenses , Debit side will increase and credit side will DEcrease(Less in expenses)
5.In Income, Debit side will decrease and credit side will increase.
See the examples for second rules of Debit and credit:
Started business with capital rs 100000. These are language of business.
Capital needs to run a business.Business can not be done without capital.
Which Account is capital? ans- CAPITAL is personal account(+).Which account is cash? ans- cash is asset account. Because Debit side will increase(+). WE will discuss forward in next post.
TRY to solve these questions:
What is the second rules of debit and credit?
2.Capital needs to do a ___________
3.Started business with capital rs100000. Which account is capital?