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CBSE Class 11 Accountancy★ 6–8 marks · Class 11 Accountancy (Unit — Recording of Transactions)

Recording of Transactions – I

Class 11 Accountancy — the first step of the accounting cycle. The accounting equation, the rules of debit and credit (for assets, liabilities, capital, revenue, expenses), source documents and vouchers, and how to record transactions in the Journal with journal entries — with fully solved board-pattern problems.

⏱ 30 min readMedium difficulty✓ Free · NCERT-aligned

Worksheet

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Mind Map

The chapter at a glance

Every concept and exam-favourite branch — revisable in 5 minutes.

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Study Guide

Night-before notes

Key points, glossary and the questions most likely to show up.

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By the end of this chapter you'll be able to…

1State and apply the accounting equation
2Apply the rules of debit and credit for all account types
3Identify source documents and vouchers
4Pass journal entries, including compound and opening entries
5Record transactions accurately in the Journal

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Why this chapter matters

The practical heart of the subject. Journalising and the accounting equation carry heavy marks every year, and the debit/credit rules underpin every later chapter (ledger, trial balance, final accounts).

Before you start — revise these

A 5-minute refresher here will save you 30 minutes of confusion below.

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Theory Base of Accounting (Class 11)

Dual aspect and the accrual basis underpin recording.

Recording of Transactions – I — Class 11 (Accountancy)

Now we start doing accounting. Every rupee that moves through a business must be captured — first as a journal entry, using the timeless rule of double entry: every transaction affects (at least) two accounts, one debited and one credited, and the totals always balance. Master this rule and the rest of accountancy follows.

1. The accounting equation

Every business always satisfies: $Assets = Liabilities + Capital$

Because of the dual aspect, any transaction keeps this equation balanced. Expanded: $Assets = Liabilities + Capital + Revenues - Expenses - Drawings$

Example: Owner starts business with ₹1,00,000 cash → Assets (Cash) ₹1,00,000 = Capital ₹1,00,000. Buys goods for ₹20,000 cash → Cash −20,000, Stock +20,000 (assets side rearranged; equation still balances).

2. The rules of debit and credit

Every account is one of five types. The modern rules:

Account type	Debit (Dr) when…	Credit (Cr) when…
Assets	increase	decrease
Expenses/Losses	increase	decrease
Liabilities	decrease	increase
Capital	decrease	increase
Revenue/Income/Gains	decrease	increase

Memory aid: Debit what comes in / expenses & assets ↑; Credit what goes out / incomes, liabilities & capital ↑. For every entry, total debits = total credits.

3. Source documents and vouchers

Recording must be based on evidence:

Source documents — proof of a transaction: cash memo, invoice/bill, receipt, pay-in-slip, cheque, debit/credit note.
Vouchers — prepared from source documents to authorise recording:
- Cash voucher (debit voucher for payments, credit voucher for receipts).
- Non-cash/transfer voucher — for credit transactions.

The objectivity concept requires every entry to rest on a source document.

4. The Journal — book of original entry

The Journal is where transactions are first recorded, in date order, as journal entries. Format columns: Date | Particulars | L.F. | Debit (₹) | Credit (₹).

A journal entry names the account debited first, then the account credited (written below, prefixed "To"), followed by a short narration (explanation) in brackets.

Example entries:

Started business with cash ₹1,00,000:
- Cash A/c ........ Dr 1,00,000
- To Capital A/c ........ 1,00,000
- (Being business started with cash)
Purchased goods for cash ₹20,000:
- Purchases A/c ... Dr 20,000
- To Cash A/c ........ 20,000
Sold goods on credit to Ram ₹15,000:
- Ram A/c ........... Dr 15,000
- To Sales A/c ....... 15,000
Paid rent ₹5,000:
- Rent A/c ......... Dr 5,000
- To Cash A/c ........ 5,000

5. Compound and opening entries

A compound (combined) entry records two or more transactions of the same date/nature in one entry (e.g. paid salary and rent together).
An opening entry brings forward the previous year's assets, liabilities and capital at the start of a new year (assets debited, liabilities and capital credited).

6. Closing thought

Recording begins with the accounting equation and the rules of debit and credit, backed by source documents/vouchers, and captured as journal entries in the book of original entry. Practise identifying the two accounts and their types for each transaction until it is instant. In the board exam this chapter is a major practical component — journalising and the accounting equation carry substantial marks.

Key formulas & results

Everything you need to memorise, in one card. Screenshot this for revision.

Accounting equation

Assets = Liabilities + Capital

Always balanced (dual aspect).

Expanded equation

Assets = Liabilities + Capital + Revenue − Expenses − Drawings

Shows effect of income/expense/drawings.

Assets & expenses

Debit on increase, credit on decrease

Modern rule.

Liabilities, capital, income

Credit on increase, debit on decrease

Modern rule.

Golden rule check

total debits = total credits

Every entry balances.

Journal entry format

Dr account first, 'To' Cr account, then narration

Book of original entry.

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Common mistakes & fixes

These are the exact errors that cost students marks in board exams. Read them once, save yourself the trouble.

WATCH OUT

✗ Reversing debit and credit for capital/liabilities

✓ Capital and liabilities INCREASE on the credit side and decrease on debit — opposite to assets.

WATCH OUT

✗ Recording drawings as an expense

✓ Drawings reduce capital (Drawings A/c Dr, To Cash/Goods) — not a business expense.

WATCH OUT

✗ Debiting the customer's name for a cash sale

✓ For a cash sale, debit Cash; only debit the customer (debtor) for a CREDIT sale.

WATCH OUT

✗ Omitting the narration

✓ Every journal entry needs a brief narration in brackets explaining it.

WATCH OUT

✗ Unbalanced entries

✓ Always check total debit equals total credit before moving on.

NCERT exercises (with solutions)

Every NCERT exercise from this chapter — what it covers and how many questions to expect.

Accounting equation problems

Effect of transactions on the equation

Questions

Journalising problems

Passing journal entries incl. compound/opening

Questions

Practice problems

Try each one yourself before tapping "Show solution". Active recall > rereading.

Q1EASY· Equation

State the basic accounting equation.

▶ Show solution

Assets = Liabilities + Capital.

✦ Answer: Assets = Liabilities + Capital.

Q2EASY· Rule

Is an increase in an asset debited or credited?

▶ Show solution

Debited.

✦ Answer: debited.

Q3EASY· Document

Name the source document prepared when goods are sold on credit.

▶ Show solution

An invoice/bill (sales invoice).

✦ Answer: invoice/bill.

Q4MEDIUM· Equation effect

Show the effect on the accounting equation: started business with ₹50,000 cash, then bought goods for ₹10,000 cash.

▶ Show solution

Step 1 — Capital introduced: Assets (Cash) 50,000 = Capital 50,000.

Step 2 — Goods bought for cash: Cash −10,000, Stock +10,000 → Assets still 50,000 = Capital 50,000.

✦ Answer: equation stays 50,000 = 50,000 (assets rearranged).

Q5MEDIUM· Journal

Pass the journal entry: purchased furniture for cash ₹12,000.

▶ Show solution

Step 1 — Furniture (asset) increases → debit; Cash (asset) decreases → credit.

Step 2 — Furniture A/c Dr 12,000; To Cash A/c 12,000 (Being furniture bought for cash).

✦ Answer: Furniture A/c Dr 12,000 / To Cash A/c 12,000.

Q6MEDIUM· Journal

Pass the entry: sold goods on credit to Mohan ₹8,000.

▶ Show solution

Step 1 — Mohan (debtor, asset) increases → debit; Sales (income) increases → credit.

Step 2 — Mohan A/c Dr 8,000; To Sales A/c 8,000 (Being goods sold on credit).

✦ Answer: Mohan A/c Dr 8,000 / To Sales A/c 8,000.

Q7HARD· Compound

Pass a compound entry: paid salary ₹6,000 and rent ₹4,000 in cash.

▶ Show solution

Step 1 — Salary and Rent (expenses) increase → both debited; Cash decreases → credited.

Step 2 — Salary A/c Dr 6,000; Rent A/c Dr 4,000; To Cash A/c 10,000 (Being salary and rent paid).

✦ Answer: Salary Dr 6,000, Rent Dr 4,000 / To Cash 10,000.

Q8HARD· Drawings

Pass entries: (a) owner withdrew ₹5,000 cash for personal use; (b) took goods worth ₹2,000 for home.

▶ Show solution

Step 1 — (a) Drawings A/c Dr 5,000; To Cash A/c 5,000.

Step 2 — (b) Drawings A/c Dr 2,000; To Purchases A/c 2,000 (goods taken reduce purchases).

✦ Answer: Drawings Dr in both; credit Cash then Purchases.

Q9MEDIUM· Rule

State the debit/credit rule for liabilities and give an example entry.

▶ Show solution

Step 1 — Liabilities increase on credit, decrease on debit.

Step 2 — E.g. bought goods on credit from Sohan ₹7,000: Purchases A/c Dr 7,000; To Sohan A/c 7,000 (creditor/liability increases → credit).

✦ Answer: liabilities credited on increase; Purchases Dr / To Sohan.

5-minute revision

The whole chapter, distilled. Read this the night before the exam.

•Assets = Liabilities + Capital (always balances).
•Assets/expenses: debit on increase; liabilities/capital/income: credit on increase.
•Every transaction has equal debit and credit (double entry).
•Source documents: cash memo, invoice, receipt, cheque, notes.
•Journal = book of original entry; entry names Dr account then 'To' Cr account + narration.
•Drawings reduce capital; goods taken reduce purchases.
•Compound entry combines several same-date transactions.

CBSE marks blueprint

Where the marks come from in this chapter — so you can plan your prep.

Typical chapter weightage: 6–8 marks

Question type	Marks each	Typical count	What it tests
Objective / very short	1	1–2	Equation, debit/credit rule, documents
Short answer	3–4	1	Accounting equation effects
Long / practical	4–6	1	Journalising a set of transactions

Prep strategy

Drill the debit/credit rules until automatic
Practise many journal entries of each type
Always identify the two accounts and their types first
Check total debits = total credits for every entry

Where this shows up in the real world

This chapter isn't just an exam topic — it lives in the world around you.

Bookkeeping

Journal entries are the starting point of all business records.

Software

Accounting apps (Tally, ERP) automate these same debit/credit rules.

Auditing

Vouchers and source documents are the evidence auditors check.

Personal finance

Double-entry logic clarifies where money comes from and goes.

Exam strategy

Battle-tested tips from teachers and toppers for this chapter.

Write journal entries in the correct format with narration.
State account types to justify debit/credit in explanation questions.
Keep the accounting equation balanced in equation problems.
Treat drawings and goods-withdrawn correctly.
Double-check totals of debit and credit columns.

Going beyond the textbook

For olympiad aspirants and curious learners — topics that build on this chapter.

Traditional (personal/real/nominal) vs modern classification of accounts.
Accounting equation with GST components.
Effect of adjusting entries on the equation.
Error types that still keep the trial balance agreed.

Where else this chapter is tested

CBSE board isn't the only one — other exams test this chapter too.

CBSE / RBSE Class 11 AccountancyHigh — journalising is a major component

CA/CS FoundationHigh — double entry is core

Commerce entrance testsMedium — recording basics

Class 12 AccountancyHigh — builds directly on this

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Questions students ask

The real ones — pulled from the Q&A community and tutor sessions.

Yes — it follows the NCERT Accountancy textbook, so recording rules are common across CBSE and most state boards (including RBSE); each board sets its own exam pattern.

Identify the two accounts affected and their type. Assets and expenses are debited when they increase; liabilities, capital and income are credited when they increase — and total debit must equal total credit.

For a cash sale you debit Cash; for a credit sale you debit the customer (a debtor). Both credit the Sales account.

The narration briefly explains the transaction, making the entry understandable and verifiable — supporting the objectivity and full-disclosure principles.

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