NCERT Class 11 Accountancy Financial Accounting-I: Chapter 3 — Recording of Transactions - I
This chapter, "Recording of Transactions-I" from NCERT Class 11 Accountancy (Financial Accounting-I), details the initial steps of the accounting process. It explains how business transactions are identified, evidenced by source documents like cash memos and invoices, and then recorded. The chapter introduces the concept of accounting vouchers, including their preparation and classification (cash, debit, credit, journal vouchers). It emphasizes that transactions involve a reciprocal exchange with two-fold effects, requiring recording in at least two accounts. The importance of source documents as evidence and the chronological arrangement of vouchers are highlighted. This foundational knowledge is crucial for students to understand the practical application of accounting principles in recording business activities for CBSE learning.
Quick info
| Board | CBSE / NCERT |
|---|---|
| Class | Class 11 |
| Subject | Accountancy |
| Book | Financial Accounting-I |
| Chapter | Chapter 3 — Recording of Transactions - I |
| Language | English |
| PDF type | NCERT Textbook |
| Session | CBSE 2026 |
| Reading time | 4 minutes |
| Word count | 638 |
Learning outcomes
- Describe the nature of business transactions and source documents.
- Explain the preparation of accounting vouchers.
- Apply the accounting equation to explain the effect of transactions.
- Record transactions using the rules of debit and credit.
- Explain the concept of the book of original entry (journal) and recording transactions.
- Explain the concept of the ledger and posting journal entries.
Vocabulary
| Word | Meaning |
|---|---|
| Transaction | An exchange of economic consideration between parties, having two-fold effects. |
| Source Document | A document providing evidence of a business transaction (e.g., cash memo, invoice). |
| Voucher | A document providing evidence of a transaction, or prepared when no documentary evidence exists. |
| Accounting Voucher | Vouchers classified as cash, debit, credit, or journal vouchers used for recording transactions. |
| Journal | The basic book of original entry where transactions are first recorded. |
| Ledger | The principal book containing individual accounts where journal entries are posted. |
| Debit | One of the two aspects of a transaction, typically representing what is received or an increase in assets/expenses. |
| Credit | The other aspect of a transaction, typically representing what is given or an increase in liabilities/equity/revenue. |
| Narration | A brief explanation of a transaction recorded in a voucher or journal entry. |
| Chronological Order | Arrangement of documents or entries according to the date of occurrence. |
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Practice questions
- What is a business transaction? Answer: A business transaction is an exchange of economic consideration between parties that has two-fold effects and is recorded in at least two accounts.
- Give examples of source documents. Answer: Examples include Cash memo, Invoice, Sales bill, Pay-in-slip, Cheque, Salary slip.
- What is the purpose of an accounting voucher? Answer: Accounting vouchers provide evidence of transactions and are used as the basis for recording transactions in the books of accounts.
- What is the difference between a journal and a ledger? Answer: The journal is the book of original entry where transactions are recorded first chronologically, while the ledger is the book of final entry where transactions are classified into different accounts.
- What does a transaction voucher typically include? Answer: A transaction voucher typically includes the voucher number, date, debit account, credit account, amount, narration, and authorization details.
Frequently asked questions
What is the first step in the accounting process discussed in this chapter?
The first step involves identifying the transactions to be recorded and preparing the source documents.
What is a source document in accounting?
A source document is a document that provides evidence of a business transaction, such as a cash memo or invoice.
What are the different types of accounting vouchers mentioned?
Accounting vouchers can be classified as cash vouchers, debit vouchers, credit vouchers, and journal vouchers.
Why are source documents important in accounting?
Source documents are important because they provide evidence for the transactions recorded in the books of accounts.
What is the 'give and take' aspect of a business transaction?
It refers to the reciprocal exchange involved in a transaction, where something is given (e.g., cash payment) and something is received (e.g., delivery of a computer).
Where are transactions first recorded in accounting?
Transactions are first recorded in the basic book of original entry, which is called the journal.
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NCERT Class 11 Accountancy — Financial Accounting-I — Chapter 3 — Recording of Transactions - I. Verified by NCERT Help Editorial Team. Reviewed on 29 Jul 2026. Last updated 10 Aug 2026.