Accounting Records

and Systems
CA Jayendra Malhotra

Journal : Primary book of accounts where the

transactions/events are first recorded in
chronological order

Principal Book : The book which has record of

the transaction/Event in a summarized
manner i.e Ledger
Balance of Accounts : It is the totalling of two
sides of the account and determining the
difference. The difference between the total
of two sides is written in the side with
shorter total

Debit/Credit Rule : Modern

Approach
Types of Account

Debit

Credit

Capital Account

Decrease

Increase

Liability Account

Decrease

Increase

Expense Account

Increase

Decrease

Assets Accounts

Increase

Decrease

Revenue Account

Decrease

Increase

Debit/ Credit Rule : Traditional

Approach

Flow of Recording of
Transactions
Transaction/
Events

Journal

Ledger

Trading and
Profit and
Loss
Account
Trial
Balance
Balance
Sheet

Nature of Accounts
Real
Personal
Nominal

Exercise
Date

Particulars

Amount (INR)

1st April

Mr K started Business with cash

100000

2nd April

Bought Good for cash

30500

3rd April

Opened Bank Account with Cash

50000

4th April

Sold goods for Cash

40000

5th April

Bought goods from Surya

30000

6th April

Sold goods to Rakesh

25000

7th April

Purchased Plant and Machinery by

cheque

16600

Date

Transactions

Amount (INR)

8th April

Paid to surya in Cash

10000

9th April

Received loan from

Anil and deposited to
Bank

8000

10th April

Goods returned to
surya

1000

11th April

Withdrew from Bank

Personal use

5000

12th April

Paid to surya by
cheque

8000

13th April

Received cash from

Rakesh

10000

14th April

Purchased stationary
by cash

200

15th April

Paid wages and

10000