NCERT Solutions for Class 11 Accountancy Chapter 3 Recording of Transactions 1

The NCERT textbook for Accountancy Class 11 Chapter 3 has practise questions at the end to help students gauge their understanding of the concepts learned in the chapter. Extramarks provides NCERT Solutions for Class 11 Accountancy Chapter 3 to help students find accurate answers to the textbook questions. The solutions are prepared by subject matter experts at Extramarks who have ensured that every answer is factually correct and written in a simple language. The NCERT Solutions for Class 11 Chapter 3 can aid students in their preparation for school and competitive examinations.

Class 11 Accountancy NCERT Solutions Chapter 3 Recording of Transactions 1 

NCERT Accountancy Class 11 Solutions

As students are introduced to new concepts in accountancy, they might find the subject overwhelming. Solving NCERT textbook questions could help students in improving their understanding of the chapter . When studying Chapter 3 Recording of Transactions 1 from the NCERT textbook, students should refer to the NCERT Solutions by Extramarks to get accurate answers to the questions. The solutions can also be referred to cross-check the answers that students have written themselves. 

What is Accounting?

Accounting, also known as Accountancy, is defined as the process of identification, measurement, recording, summarising, and communicating businesses and financial information. It involves transactions, analysis, verification, and reporting of financial reports. Accounting also helps measure the output of economic organisations or corporations in general. The information collected is then communicated to the various pillars of the business, such as the stakeholders, investors, management faculty, creditors, etc. 

Advantages of Accounting

Without accounting, a business cannot stand. Some of the advantages are mentioned below:

  • Accounting helps in appropriate decision-making.
  • It is the best way to maintain business records.
  • It supports taxation matters and helps in the preparation of financial statements.
  • The valuation of the business is analysed with the help of accounting.
  • The determination of the selling price is guarded by accounting, and it also assists in raising loans.
  • Accounting helps to keep the business records and secures information of other parties at large.

Debit and Credit Rules

Terms ‘debit and credit’ are common and heard by almost everyone. They have a significant role in accounting. Given below are some debit and credit rules:

  • Wherever an increment in expenses, assets, and dividends is concerned, the term ‘debit’ comes into the act. 

Asset in accounting represents any resource acquired and controlled by an economic body, business, or financial corporation.

Expense in accounting refers to the total amount of money spent on various things. 

Dividend in accounting refers to a part of the company’s earnings that it returns to the investorsCredits are generally associated with increased liabilities, revenues, and equity.

Liability in the business world is regarded as a company’s financial obligation like the money a business owes. 

Revenue is considered the complete sales or the amount of income generated by a company. 

The shareholder’s stake in the company is equity.

Solved Example

Q1. What are the three fundamental steps in the process of accounting?

A1. Here are the three important steps in accounting process:

  1. Identification and analysis of business transactions.
  2. Recording of business transactions.
  3. Classification and summarising the effect of the transactions, and communicating the same to the interested users of the business information.

Fun Facts

  • Do you know that the students in China are said to receive the most homework globally. On an average, a student spends 14 hours doing homework in a week.
  • In Brazil, it is mandatory to have meals with family, which is why schools get over by noon.

FAQs (Frequently Asked Questions)

The NCERT Solutions for Class 11 Accountancy Chapter 3 comprise answers to all the questions that are given at the end of Chapter 3 in NCERT textbook. By referring to solutions, students will not only know the correct answer, but also get an idea of how to attempt a question and score more marks in examinations.

The concept of double-entry bookkeeping was introduced by Venetian merchants in the 15th century. The transactions and events in a double-entry system are recorded through ‘debit-credit rule’. In this rule, the instructions to record or make changes in elements of balance sheets are provided. Two-fold effect of every transaction is explained in the double-entry bookkeeping system.

Here are the pointers explaining the importance of source documents in accounting:

  • Help determine if the transaction happened or not.
  • Can be used as a proof in court.
  • Give information related to account, date, and people who were involved in a particular transaction.
  • Help in verifying different transactions at the time of audit.