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7/28/2019 AFM Unit2
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Date Particulars L.F
Number
Debit Credit
1 2 3 4 5
Journal:
Book of original entryRecords all daily transactions in chronological order
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1. Identify business transaction
2. Identify at least two important accounts
3. Identify the nature of accounts4. Apply the rule of Debit and Credit
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Transaction Accounts involved Nature of Accounts Debit/Credit
Rent paid Rent A/cCash A/c
NominalReal
DebitCredit
Salaries paid Salaries A/c
Cash A/c
Nominal
Real
Debit
Credit
Interest paid Interest A/c
Cash A/c
Nominal
Real
Debit
CreditDividend received Cash A/c
Dividend A/c
Real
Nominal
Debit
Credit
Machinery
purchased
Machinery A/c
Cash A/c
Real
Real
Debit
Credit
Paid to Suresh Suresh A/cCash A/c
PersonalReal
DebitCredit
Received from
Mohan
Cash A/c
Mohan A/c
Real
Personal
Debit
Credit
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How to write Journal entryDate Particulars L.F.No Debit Amount Credit Amount
2011July1
Rent A/c DrTo Cash A/c
(Being rent paid)
21
10001000
2011
July 2
Machinery A/c Dr
To Cash A/c
(Being machinery
purchased for cash)
3
1
20000
20000
2011
July 6
Cash A/c Dr
To Dividends A/c
(Being dividends received)
1
4
500
500
2011July 7
Cash A/c DrTo Mohan A/c
(Being cash received from
Mohan
15
950950
5
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Many transactions on the same date relatingto one particular account or nature may be
recorded by means of a single journal entry
Date Particulars L.F.No Debit Amount Credit Amount
Cash A/c Dr
Land A/c Dr
Furniture A/c Dr
Stock A/C Dr
To Creditors A/c
To Bank O.D A/c
To Capital A/c
(Being commencement of business by
taking over a running business)
2000
4000
1000
2000
1000
2000
6000
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Date Particulars L.F.No Debit Amount Credit AmountCash A/c Dr
Land A/c Dr
Furniture A/c Dr
Stock A/C Dr
Sundry Debtors Dr
To Creditors A/c
To Bank O.D A/c
To Capital A/c
(Being balances brought forward from
the last year)
2000
4000
1000
2000
5000 1000
2000
11000
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Ledger is a book which contains variousaccount (Real, Personal, Nominal)
Posting: Transferring the debits and creditsitems from journal to respective accounts inthe ledger
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Date Particular Amount Date Particulars Amount
Dr Cr
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Separate accounts should be opened for postingtransactions relating to different accounts in
journal
The A/c which has debited in journal should alsobe debited in the ledger by giving reference of
other A/c which has credited in the journal
The A/c which has been credited in journal
should also be credited in the ledger by giving
reference of other A/c which has credited in the
journal.
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Date Particulars Amount Date Particulars Amount
1-7-10
4-7-107-7-10
To Capital
To SureshTo Raju
10,000
3,0001,000
2-7-10
5-7-1031-7-10
By Mohan
By RameshBy Balance C/d
1,000
1,00012000
14000 14000
1-8-10 To Balance B/d 12000
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Dr Cr
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Trial Balance is a statement containing thevarious ledger balances on a particular date.
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Particular Debit
Amount
Credit
Amount
Cash Account 12,000
Capital Account 10,000
Purchases Account 4,000
Mohan Account 2,000
Sales Account 4,000
16,000 16,000
Trial Balance as on 31st January 2011
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Objectives of preparing a Trial Balance
1. check the arithmetical accuracy.
2. Basis for financial statement.
3. Summarized ledger.
Methods of preparing Trial Balance
Total Method
Balance Method
Total and Balance Method
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