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6. Journal is a book of original entry in which the transactions are recorded are recorded first of
all as and when they take place .Transactions are originally recorded in a chronological order
according to the principles of double entry system.
7. It maintains a identity of each transaction by keeping a complete record of each transaction
at one place on a permanent basis. It provides a basis for posting into ledger A single
entry is capable of recording more than one transaction involving more than two accounts
.such an entry is called compound entry Each entry in a journal is followed by a brief
explanation of the transaction which is called Narration A journal records both debit and
credit aspects of a transactions according to the double entry system of book keeping
Features of Journal
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4. It maintains a identity of each transaction by keeping a complete record of each
transaction at one place on a permanent basis. It provides a basis for posting into ledger
A single entry is capable of recording more than one transaction involving more than two
accounts .such an entry is called compound entry Each entry in a journal is followed by a
brief explanation of the transaction which is called Narration A journal records both debit
and credit aspects of a transactions according to the double entry system of book keeping
Copyright Akhil Journal is a book of original entry in which the transactions are recorded
are recorded first of all as and when they take place .Transactions are originally recorded in a
chronological order according to the principles of double entry system. Features of Journal
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The Ledger is the chief book of accounts, and it is in this book that all the business transactions
would ultimately find their place under their accounts in a duly classified manner. Rules of Posting 1.
All the transactions relating to an account should be entered at one place. 2. The world To is used
before the accounts which appear on the debit side of an account. Similarly, the world By is used
before the accounts which appear on the credit side of an account. 3. If an account is debited in
journal entry, the posting in the ledger should also be made on the debit side of such an account. 4.
Similar account which has been posted on the debit side of an account should also be posted on the
credit side of an account.

The Trial Balance Is a statement Prepared with the help of ledger balances, at the end of financial
year to find out whether debit total agrees with the credit total. Characteristics of Trial Balance It is a
list of balances of all ledger accounts and the cash book It is just an statement not an account It can
be prepared at any time during the accounting period , It is prepared to check the arithmetical
accuracy of the ledger accounts It helps in preparation of the final accounts It is to obtain the
summary of the ledger accounts

1. Trading and P/L accounts are a part of final accounts. It is also called the Income Statements
It is divided into two parts 1. Trading Account 2. Profit & loss Account Trading Account Is
prepared for calculating gross Profit or gross loss arising or incurred as a result of trading
activities of a business. Profit & Loss Account is an account into which all gains and losses
are collected, in order to ascertain the excess of gains over losses or losses over gains.
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11. A Balance Sheet is a part of final Accounts. This is the reason that tradingCopyright Akhil
A Balance Sheet is a statement at a particular date showing on one side the trader property
and possessions and on the other hand the liabilities Features Of balance sheet & The
totals of the two sides of Balance Sheet must be equal. If the totals are not equal, there will
be an error somewhere It shows the financial position of the business according to the
going concern concept. Balance is prepared on particular date and not on a fixed period.
P/L A/c and the balance sheet are called Final Accounts. However Balance sheet is a
statement not an account having assets and liabilities side that is why it is also called
Position Statement
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