Chapter 3 of Class 11 Accountancy, titled Recording of Transactions – 1, is one of the most important chapters in the entire book. This chapter explains how financial transactions are recorded for the first time in the books of accounts. It introduces the journal, source documents, and basic steps of recording day-to-day business transactions using debit and credit rules. Students will learn how to pass journal entries using the double-entry system of accounting.
The reason I’ve chosen to write about this chapter is that many students get confused when they reach the practical part of accounting. They might understand the theory, but when it comes to writing actual journal entries, they get stuck. This chapter is the base of all future practical work. Without knowing how to pass journal entries correctly, you won’t be able to prepare ledgers, trial balance or final accounts. That’s why I always suggest students take this chapter seriously. I’ve also added the free PDF download link, so you can read it even when you’re offline or while travelling. Having a soft copy helps during revision and practice.
What is Recording of Transactions – 1 About?
This chapter teaches how a business records its daily financial transactions for the first time. It explains where the entries are made, how the transactions are identified, and how to apply debit and credit rules correctly.
Here’s what you will learn from this chapter:
1. Source Documents
Every transaction starts with a proof. These proofs are known as source documents. Some common ones are:
- Cash memo – for cash sales or purchases
- Invoice or Bill – for credit transactions
- Cheque and counterfoils – for bank-related payments
- Receipt – for receiving cash
- Pay-in-slip – for depositing cash into the bank
2. Preparation of Vouchers
Based on these source documents, vouchers are prepared. These are internal documents used by accountants to pass entries in the journal.
3. Journal Entries
A journal is the book of original entry. All transactions are first recorded here. For example:
- Paid salary ₹10,000 → Salary A/c Dr. 10,000, To Cash A/c 10,000
- Purchased goods on credit ₹5,000 → Purchases A/c Dr. 5,000, To Creditor’s A/c 5,000
4. Rules of Debit and Credit
This is the core part of the chapter. Students must learn the three golden rules:
| Account Type | Debit What… | Credit What… |
|---|---|---|
| Personal Account | The receiver | The giver |
| Real Account | Comes in | Goes out |
| Nominal Account | All expenses and losses | All incomes and gains |
5. Accounting Equation and its Use
Before passing entries, we use the accounting equation to see how a transaction affects assets, liabilities and capital.
Example:
- If you invest ₹50,000 in business, then:
- Assets increase (cash), Capital increases
Download PDF
Click Here to Download NCERT Class 11 Accountancy Chapter 3: Recording of Transactions – 1 PDF
