Book-Keeping and Accountancy · Class 11 Commerce
Ch 2Meaning and Fundamentals of Double Entry Book-Keeping — Class 11 Book-Keeping and Accountancy, concept-first.
The previous chapter introduced the Double Entry System briefly, as one of the two systems of book-keeping. This chapter takes up the Double Entry System in full — its meaning, the principle it rests on, its features, and how it lets us classify every account and decide, for any transaction, exactly which account shoul…
Key concepts
Hover a concept to preview it and jump to its most relevant Q&A.
Double Entry System — Meaning and Features
The Double Entry System records every business transaction on the principle that it has two equal and opposite aspects, a debit and a credit, both recorded in the books.
Most relevant Q&A
Chapter contents
The NCERT structure, section by section. Open a section to see its questions, then read the concept-first solution.
Meaning and Features of the Double Entry System
The previous chapter introduced the Double Entry System briefly, as one of the two systems of book-keeping.
Dual Aspect Concept
Underneath the Double Entry System lies a single foundational idea, called the Dual Aspect Concept (also called the Dual Aspect Principle) — every transaction that a business enters into has two aspec…
The Accounting Equation
The Dual Aspect Concept can be expressed, at any point in time, in a single equation that must always hold true for every business, however large or small.
Classification of Accounts — Traditional (British) Approach
Before a transaction can be recorded, every account it affects must first be classified — this tells us which rule of debit and credit to apply to it.
Golden Rules of Debit and Credit (Traditional Approach)
Once an account has been classified as Personal, Real, or Nominal, the following three rules — universally known as the Golden Rules of Accounting — decide whether that account is to be debited or cre…
Classification of Accounts — Modern (American) Approach
The Modern Approach, developed in American accounting practice and now taught alongside the Traditional Approach in most Indian commerce syllabi, including MSBSHSE's, classifies every account into one…
Analysing a Transaction into Debit and Credit
Whichever approach is used, analysing any transaction into its debit and credit follows the same logical sequence of steps.
Exercises
+−Show 10 questionsHide questions10 questions
- Q1Explain the meaning of the Double Entry System of book-keeping and state its main features.Free
- Q2State any four advantages of the Double Entry System of book-keeping.Free
- Q3What is the Dual Aspect Concept? Explain with a suitable example.Free
- Q4What is the Accounting Equation? State its components and explain why it always remains in balance.Preview
- Q6Distinguish between the Traditional Approach and the Modern Approach of classifying accounts.Preview
- Q7Classify the following accounts under the Traditional Approach, stating whether each is a Personal, Real, or Nominal account: (i) Cash A/c (…Preview
- Q8State the Golden Rules of Debit and Credit under the Traditional Approach, giving one example for each rule.Preview
- Q9State the Modern Rules of Debit and Credit for each of the five categories of accounts.Preview
- Q11Under the Traditional Classification of accounts, 'Outstanding Salary A/c' is classified as: (a) Real Account (b) Nominal Account (c) Person…Preview
- Q12Under the Modern Approach, an increase in an Expense account is recorded as: (a) Credit (b) Debit (c) Either debit or credit, depending on t…Preview
More questions
+−Show 2 questionsHide questions2 questions
- Example 5Show the effect of the following transactions on the Accounting Equation of Mr. Anil: (i) Started business with cash ₹1,00,000 (ii) Purchase…Free
- Example 10Analyse the following transactions, stating the two accounts involved, their classification under the Modern Approach, and which account is…Preview