Recording of Transactions-II – NCERT Class 11 Accountancy Financial Accounting Part I, Chapter 4 – Summary, Special Purpose Books, and Ledger Posting

Detailed guide to recording transactions using special purpose books (Cash Book, Purchases Book, Purchases Return Book, Sales Book, Sales Return Book, Journal Proper); covers petty cash systems, ledger posting, balancing, and examples for efficient accounting.

Updated: 5 days ago

Categories: NCERT, Class XI, Accountancy, Financial Accounting, Recording Transactions, Special Purpose Books, Cash Book, Chapter 4

Tags: Recording Transactions-II, Special Purpose Books, Cash Book, Petty Cash Book, Purchases Book, Purchases Return Book, Sales Book, Sales Return Book, Journal Proper, Ledger Posting, Balancing Accounts, Credit and Debit Notes, NCERT Class 11, Accountancy, Chapter 4, Practice Questions

Recording of Transactions - II: Class 11 NCERT Chapter 4 - Ultimate Study Guide, Notes, Questions, Quiz 2025

Full Chapter Summary & Detailed Notes - Recording of Transactions - II Class 11 NCERT

Overview & Key Concepts

Chapter Goal: Understand special purpose books for efficient recording of repetitive transactions. Exam Focus: Cash book preparation/balancing, special journals (purchases/sales/returns), posting to ledger, Journal Proper. 2025 Updates: Digital special books, integration with ERP. Fun Fact: Subsidiary books speed up accounting by 70%. Core Idea: Sub-divide journal into special books for volume efficiency. Real-World: Retail uses sales book daily. Ties: To Chapter 3 (Journal basics). Expanded: Need for special books, formats, contra entries, bank reconciliation hints. Global: IFRS allows subsidiary ledgers. Ethical: Accurate contra postings prevent fraud.
Wider Scope: Economical division of labour; original entry + ledger function (cash book).
Expanded Content: Cash book types, pay-in-slip/cheque/crossing, special books formats, posting rules, balancing.

Need for Special Purpose Books

In Chapter 3, transactions recorded in journal then posted to ledger. Small business: One journal OK. Large: Cumbersome; sub-divide into special journals (daybooks/subsidiary books) for repetitive transactions e.g., cash in cash book, credit sales in sales book.
Non-fitting: Journal Proper. Benefits: Quick, efficient, accurate; division of labour.
Point: Repetitive nature; economical.
Expanded: Example - All cash sales in cash book, credit purchases in purchases book.

4.1 Cash Book

Records cash receipts/payments; starts with opening balance (monthly). Serves as journal + ledger (no separate cash account). Popular for all orgs.

Simple Example: Single Column Cash Book (Roopa Traders from PDF)

Simple Way: Left side receipts (like income), right side payments (like expenses). Balance = Receipts - Payments.

Date	Receipts	Amount ₹	Date	Payments	Amount ₹
Nov 01	Balance b/d	30,000	Nov 08	Insurance	6,000
Nov 04	Gurmeet	12,000	Nov 13	Furniture	13,800
Nov 16	Sales	28,000	Nov 17	Purchases	17,400
Nov 27	Sales	18,200	Nov 20	Stationery	1,100
	Total	88,200	Nov 24	Rukmani	12,500
			Nov 30	Rent	2,500
			Nov 30	Salary	3,500
			Nov 30	Bank	8,000
			Nov 30	Balance c/d	23,400
				Total	88,200
Dec 01	Balance b/d	23,400

Step-by-Step: 1. List all cash in (receipts). 2. List all cash out (payments). 3. Total both sides (must match). 4. Balance = Total receipts - Total payments (23,400 here).

Posting from Single Column Cash Book

Simple Way: Receipts side (left) - Credit those accounts in ledger (e.g., Gurmeet credited). Payments side (right) - Debit those accounts (e.g., Furniture debited).

Example Ledger Posting for Gurmeet:

Date	Particulars	J.F.	Amount ₹
Nov 04	Cash		12,000 (Cr.)

4.1.2 Double Column Cash Book

Two columns: Cash + Bank on each side. For large bank transactions; current account (no interest, incidental charges). Pay-in-slip (deposit form, Fig 4.2), Cheque (withdrawal, Fig 4.3), Crossing types (Fig 4.4: General, Special, A/c Payee, Not Negotiable).
Contra (C): Cash to bank or vice versa - both sides, not posted to ledger.
Dishonour: Reverse entry in bank column. Bank charges: Debit bank column.

Simple Example: Double Column Cash Book (M/s Tools India from PDF)

Simple Way: Separate cash and bank columns. Contra: Cash withdrawn for office - Dr. Cash, Cr. Bank (or vice versa).

Date	Receipts Cash	Bank	Date	Payments Cash	Bank
Sept 01	Balance b/d 15,000	42,000	Sept 04		Purchases 12,000
Sept 08	Sales 6,000		Sept 13		Machine 5,500
Sept 16		Sales 4,500	Sept 17	Purchases 17,400
Sept 27	Bank C 10,000		Sept 20	Stationery 1,100
	Total 31,000	46,500	Sept 24		Rohit 1,500
			Sept 27	Cash C 10,000
			Sept 30	Salary 3,500
			Sept 30		Rent 2,500
			Sept 30	Balance c/d
				10,100	13,900
				Total 31,000	46,500
Oct 01	Balance b/d 10,100	13,900

Step-by-Step: 1. Record cash/bank in/out separately. 2. Contra marked 'C' (e.g., Sept 27: Cash withdrawn 10,000 - receipt in cash, payment in bank). 3. Balance each column independently. 4. Post non-contra: Receipts left - credit accounts; Payments right - debit accounts.

Other Special Purpose Books (Brief from Chapter)

Purchases Book: Credit purchases of goods (excluding cash). Format: Date, Invoice No., Supplier, Particulars, Amount. Total posted to Purchases A/c (Dr.), suppliers credited individually.
Purchases Return Book: Goods returned to suppliers (debit note). Total to Purchases Return A/c (Cr.), suppliers debited.
Sales Book: Credit sales. Total to Sales A/c (Cr.), customers debited.
Sales Return Book: Goods returned by customers (credit note). Total to Sales Return A/c (Dr.), customers credited.
Journal Proper: Adjusting entries, non-special transactions (e.g., depreciation, bad debts).

Summary

Special books for efficiency; cash book dual role; contra entries; posting rules maintain double-entry.
Benefits: Speed, accuracy, labour division.

Why This Guide Stands Out

Complete: All special books, examples with steps, 60 Q&A, quiz. Accountancy-focused. Free 2025.

Key Themes & Tips

Aspects: Repetitive recording, formats, balancing, posting.
Thinkers: Division of labour principles.
Tip: Practice balancing cash book; mark contra 'C'; post totals individually.

Exam Case Studies

Prepare cash book from transactions; post to ledger; explain special books.

Project & Group Ideas

Simulate special books for a retail business.
Discuss cheque crossing safety.

Key Definitions & Terms - Complete Glossary

All terms from chapter; detailed with examples, relevance. Expanded: 20+ terms with depth.

Special Purpose Books

Sub-divided journals for repetitive transactions. Relevance: Efficiency. Ex: Cash book. Depth: Daybooks/subsidiary.

Cash Book

Records cash receipts/payments; journal + ledger. Relevance: Original entry. Ex: Monthly balance. Depth: No separate cash account.

Single Column Cash Book

One amount column each side. Relevance: Pure cash business. Ex: Roopa Traders. Depth: Chronological.

Double Column Cash Book

Cash + bank columns. Relevance: Bank-heavy. Ex: Tools India. Depth: Contra entries.

Contra Entry

Cash-bank transfer; 'C' in L.F. Relevance: Not posted. Ex: Deposit 8,000. Depth: Both sides same amount.

Pay-in-Slip

Deposit form with counterfoil. Relevance: Bank deposit. Ex: Fig 4.2. Depth: Cashier signature.

Cheque

Withdrawal order. Relevance: Payment. Ex: Fig 4.3. Depth: Bearer/order.

Crossing

Two parallel lines for safety. Relevance: Bank only. Ex: A/c Payee (Fig 4.4). Depth: General/special/not negotiable.

Endorsement

Transfer by signing back. Relevance: Order cheque. Ex: Pay to another. Depth: Delivery + instruction.

Dishonour of Cheque

Returned unpaid (insufficient funds). Relevance: Reverse entry. Ex: Bank debit. Depth: Restore position.

Purchases Book

Credit purchases of goods. Relevance: Subsidiary. Ex: Invoice details. Depth: Total to Purchases Dr.

Sales Book

Credit sales. Relevance: Debtors control. Ex: Credit sales. Depth: Total to Sales Cr.

Journal Proper

Non-special entries. Relevance: Adjustments. Ex: Depreciation. Depth: Original for odd transactions.

L.F. (Ledger Folio)

Page reference to ledger. Relevance: Posting. Ex: Cross-reference. Depth: Contra 'C' instead.

Balance b/d (brought down)

Opening balance. Relevance: Continuity. Ex: Previous close. Depth: Next period start.

Balance c/d (carried down)

Closing balance. Relevance: Period end. Ex: Total difference. Depth: Reversed next as b/d.

Incidental Charges

Bank fees. Relevance: Debit bank. Ex: Commission. Depth: Current account.

Overdraft

Bank balance negative. Relevance: Credit balance possible. Ex: Excess withdrawal. Depth: Bank column Cr.

Tip: Memorize formats; contra key; posting rules. Depth: Applications. Errors: Post contra? No. Historical: Evolution from journals. Interlinks: To ledger. Advanced: Petty cash book (implied). Real-Life: Daily banking. Graphs: Figs 4.1-4.5. Coherent: Efficiency focus.

Additional: Current account no interest. Pitfalls: Dishonour ignore? Reverse. Common: Crossing types.

60+ Questions & Answers - NCERT Based (Class 11)

Part A (1 mark short), B (4 marks medium), C (8 marks long). Based on NCERT, exercises. Answer lengths: 1 mark ~2 lines, 4 marks ~5 lines, 8 marks ~10 lines with steps. Focused on special books, examples.

Part A: 1 Mark Questions (20 Qs)

1. What are special purpose books?

1 Mark Answer: Sub-divided journals for repetitive transactions, also called subsidiary books or daybooks.

2. Name one benefit of special books.

1 Mark Answer: Division of labour and efficiency in recording.

3. What is cash book?

1 Mark Answer: Book for cash receipts and payments, acts as journal and ledger.

4. Single column cash book has how many amount columns?

1 Mark Answer: One on each side (debit and credit).

5. What is contra entry?

1 Mark Answer: Transfer between cash and bank, marked 'C' in L.F., not posted to ledger.

6. What is pay-in-slip?

1 Mark Answer: Form for depositing cash/cheques in bank.

7. Define cheque.

1 Mark Answer: Written order to bank for payment to bearer or order.

8. What is general crossing?

1 Mark Answer: Two parallel lines across cheque, payable through bank only.

9. What is A/c Payee crossing?

1 Mark Answer: Cheque deposited only in payee's account.

10. Define endorsement.

1 Mark Answer: Signing back of cheque to transfer it.

11. What is dishonour of cheque?

1 Mark Answer: Cheque returned unpaid due to insufficient funds.

12. What is purchases book?

1 Mark Answer: Records credit purchases of goods.

13. Sales book records?

1 Mark Answer: Credit sales of goods.

14. What is Journal Proper?

1 Mark Answer: For transactions not fitting other special books.

15. L.F. stands for?

1 Mark Answer: Ledger Folio.

16. Balance b/d means?

1 Mark Answer: Balance brought down from previous period.

17. What is overdraft?

1 Mark Answer: Negative bank balance (credit in bank column).

18. Incidental charges are?

1 Mark Answer: Bank fees for services, debited to bank column.

19. Purchases return book is also called?

1 Mark Answer: Return Outwards Book.

20. Sales return book is?

1 Mark Answer: Return Inwards Book.

Part B: 4 Marks Questions (20 Qs)

1. Explain need for special purpose books with example.

4 Marks Answer: For large transactions, journal cumbersome; special books for repetitive e.g., cash book for all cash, sales book for credit sales. Benefits: Quick recording, division of labour. Ex: Credit purchases in purchases book only.

2. Describe single column cash book format.

4 Marks Answer: Date, Receipts (left), L.F., Amount; Date, Payments (right), L.F., Amount. Balanced monthly. Ex: Fig 4.1. No separate cash ledger.

3. How to post from cash book to ledger?

4 Marks Answer: Receipts side: Credit accounts (e.g., Sales Cr.); Payments side: Debit accounts (e.g., Purchases Dr.). Total cash not posted. Ex: Gurmeet Cr. 12,000.

4. Explain pay-in-slip and cheque.

4 Marks Answer: Pay-in-slip: Deposit form with counterfoil (Fig 4.2). Cheque: Payment order (Fig 4.3), bearer or order. Used for bank transactions.

5. Describe types of crossing.

4 Marks Answer: General: Two lines, bank only. Special: Bank name between lines. A/c Payee: Deposited in payee account only. Not Negotiable: No value transfer (Fig 4.4).

6. What is endorsement? How does it work?

4 Marks Answer: Transfer of order cheque by signing back with instructions. Bearer: Mere delivery. Ex: "Pay to X" + signature.

7. Explain dishonour of cheque entry.

4 Marks Answer: Reverse: Debit customer, credit bank. Ex: Cheque 5,000 dishonoured - restore pre-receipt position.

8. Describe double column cash book format.

4 Marks Answer: Cash and Bank columns each side (Fig 4.5). Contra for transfers. Balanced separately. Ex: Tools India example.

9. What are contra entries? Give example.

4 Marks Answer: Cash-bank moves; not posted. Ex: Cash withdrawn 10,000 - Dr. Cash 10,000, Cr. Bank 10,000; 'C' in L.F.

10. Explain current account features.

4 Marks Answer: No interest on balance; incidental charges; for frequent transactions. Ex: Business banking.

11. Describe purchases book.

4 Marks Answer: For credit goods purchases: Date, Invoice No., Supplier, Amount. Total Dr. Purchases; individual Cr. Suppliers.

12. What is sales book?

4 Marks Answer: Credit sales: Date, Invoice No., Customer, Amount. Total Cr. Sales; individual Dr. Customers.

13. Explain purchases return book.

4 Marks Answer: Return outwards: Debit note basis. Total Cr. Purchases Return; individual Dr. Suppliers.

14. Describe sales return book.

4 Marks Answer: Return inwards: Credit note. Total Dr. Sales Return; individual Cr. Customers.

15. What is Journal Proper used for?

4 Marks Answer: Adjusting entries like depreciation, bad debts, opening entries.

16. How to balance cash book?

4 Marks Answer: Total receipts = Total payments + Balance c/d. Next: Balance b/d.

17. Explain overdraft in cash book.

4 Marks Answer: Bank column credit balance; excess withdrawals.

18. Bank charges entry?

4 Marks Answer: Dr. Bank column (payments side).

19. Difference single vs double cash book.

4 Marks Answer: Single: One column, pure cash. Double: Cash + bank, for mixed.

20. Why no separate cash ledger?

4 Marks Answer: Cash book serves as cash account.

Part C: 8 Marks Questions (20 Qs)

1. Explain special purpose books with advantages. Illustrate with cash book need.

8 Marks Answer: Step 1: In large business, journal cumbersome for volume. Step 2: Sub-divide for repetitive: Cash book (cash), purchases book (credit buys). Advantages: Efficiency, accuracy, labour division. Step 3: Cash book example - Records receipts/payments, dual role. Step 4: Ex: Roopa Traders - All cash in one book, balanced monthly. Step 5: Ties to ledger posting. Ensures quick info.

2. Prepare single column cash book from Roopa Traders transactions; explain balancing.

8 Marks Answer: Step 1: List transactions: Nov 1 balance 30,000; receipts: Gurmeet 12,000, sales 28,000+18,200. Step 2: Payments: Insurance 6,000, furniture 13,800, etc. Step 3: Format table as in summary. Step 4: Total receipts 88,200 = payments 64,800 + balance 23,400. Step 5: Balancing: Subtract payments from receipts for c/d. Step 6: Next b/d 23,400. Step 7: Post: Credit receipts accounts, debit payments.

3. Post Roopa Traders cash book to relevant ledgers; explain rules.

8 Marks Answer: Step 1: Receipts (left): Credit Gurmeet (Cr. 12,000), Sales (Cr. 46,200). Step 2: Payments (right): Debit Insurance (Dr. 6,000), Furniture (Dr. 13,800), etc. Step 3: No post for balance. Step 4: Rules: Left side credits ledger, right debits. Step 5: Ex: Gurmeet ledger - Cash Cr. 12,000. Step 6: Ensures double-entry. Step 7: LF for reference.

4. Explain double column cash book with Tools India example; show contra.

8 Marks Answer: Step 1: Format: Cash/Bank columns each side. Step 2: Transactions: Balance cash 15,000/bank 42,000; sales cash 6,000/bank 4,500. Step 3: Contra: Sept 27 withdraw 10,000 - Cash receipt 10,000, bank payment 10,000 ('C'). Step 4: Balance: Cash 10,100, bank 13,900. Step 5: Posting: Non-contra only. Step 6: Ex: Purchases bank 12,000 - Debit Purchases ledger.

5. Describe cheque processing: Pay-in-slip, crossing, endorsement, dishonour.

8 Marks Answer: Step 1: Deposit: Fill pay-in-slip (Fig 4.2), counterfoil receipt. Step 2: Crossing: General (bank only), A/c Payee (no cash). Step 3: Endorsement: Sign back for transfer. Step 4: Dishonour: Bank returns, reverse entry (Dr. Customer, Cr. Bank). Step 5: Ex: Cheque 5,000 dishonoured - Restore books. Step 6: Safety: Prevents fraud.

6. Illustrate posting from double cash book; explain overdraft.

8 Marks Answer: Step 1: Tools India: Credit Sales bank 4,500; Debit Machine bank 5,500. Step 2: Contra not posted. Step 3: Bank charges: Debit bank column. Step 4: Overdraft: If payments > receipts in bank, Cr. balance. Step 5: Ex: Withdraw excess - Bank Cr. 2,000. Step 6: Balancing separate. Step 7: Ledger: Individual accounts posted.

7. Explain purchases and sales books with format and posting.

8 Marks Answer: Step 1: Purchases: Credit goods - Date, Supplier, Invoice, Amount. Step 2: Total Dr. Purchases A/c; individual Cr. Suppliers. Step 3: Sales: Credit sales - Similar, total Cr. Sales; Dr. Customers. Step 4: Ex: Purchases 20,000 from A - Purchases book entry, post A Cr. 20,000. Step 5: No cash entries. Step 6: Efficiency for volume.

8. Describe return books: Purchases return and sales return.

8 Marks Answer: Step 1: Purchases Return: Goods returned - Debit note, total Cr. Purchases Return (reduces purchases). Step 2: Individual Dr. Suppliers. Step 3: Sales Return: Customer returns - Credit note, total Dr. Sales Return (reduces sales). Step 4: Individual Cr. Customers. Step 5: Ex: Return 5,000 to supplier B - Dr. B 5,000. Step 6: Maintains accuracy.

9. What is Journal Proper? Give examples of entries.

8 Marks Answer: Step 1: For non-special: Adjustments. Step 2: Examples: Depreciation Dr. 10,000 Cr. Machinery; Bad debt Dr. 2,000 Cr. Debtor. Step 3: Opening: Dr. Assets Cr. Liabilities/Capital. Step 4: Closing: Nominal to P&L. Step 5: Format like journal. Step 6: Ensures all covered.

10. Prepare double cash book for given transactions (e.g., cash sales 10,000, bank deposit 5,000, etc.).

8 Marks Answer: Step 1: List: Opening cash 20,000; receipts cash sales 10,000, cheque sales 8,000 (deposited). Step 2: Payments: Cash purchase 7,000, cheque rent 4,000. Step 3: Contra: Deposit 5,000 - Cash payment 5,000, bank receipt 5,000. Step 4: Balance: Cash 18,000, bank 9,000. Step 5: Table format. Step 6: Verify totals.

11. Explain bank reconciliation hints from cash book.

8 Marks Answer: Step 1: Cash book bank column vs passbook. Step 2: Differences: Outstanding cheques (not in book), deposits in transit. Step 3: Dishonour: Already reversed. Step 4: Charges: If not entered, adjust. Step 5: Ex: Cheque issued 3,000 not cleared - Add to book balance. Step 6: Balance as per book + adjustments = passbook.

16. Discuss advantages of special books over single journal.

8 Marks Answer: Step 1: Single journal: All in one, slow for large. Step 2: Special: Repetitive grouped, quick lookup. Step 3: Ex: Sales book totals direct to sales ledger. Step 4: Labour: Different clerks for books. Step 5: Accuracy: Less errors in sub-division. Step 6: Economical: Time-saving.

12. Illustrate cheque dishonour entry with example.

8 Marks Answer: Step 1: Receive cheque 6,000 from C, deposited. Step 2: Dishonoured: Bank informs. Step 3: Entry: Dr. C A/c 6,000, Cr. Bank 6,000 (payments side). Step 4: Restores: C debtor again. Step 5: If interest: Additional Dr. Step 6: Ledger: C Dr. 6,000.

13. Prepare purchases book for 3 credit purchases; post to ledger.

8 Marks Answer: Step 1: Entries: A 15,000, B 20,000, C 10,000. Step 2: Total 45,000 Dr. Purchases. Step 3: Post: A Cr. 15,000, etc. Step 4: Format: Date, Invoice, Supplier, Amount. Step 5: Journal: If cash, not here. Step 6: Ledger example for A.

14. Explain sales return book with posting rules.

8 Marks Answer: Step 1: Customer returns 8,000 - Credit note. Step 2: Entry in book. Step 3: Total Dr. Sales Return A/c. Step 4: Individual Cr. Customer. Step 5: Ex: D returns - D Cr. 8,000. Step 6: Reduces sales; ledger update.

15. Describe full process: Transaction to special book to ledger.

8 Marks Answer: Step 1: Identify: Credit sale - Sales book. Step 2: Enter: Date, customer, amount. Step 3: Total post to Sales Cr. Step 4: Individual Dr. Customer ledger. Step 5: Ex: Sale to E 12,000 - Book entry, post. Step 6: Balance ledger.

17. Compare cash book with other special books.

8 Marks Answer: Step 1: Cash book: Cash only, dual role. Step 2: Purchases/Sales: Credit only, subsidiary. Step 3: Returns: Adjustments. Step 4: Journal Proper: Miscellaneous. Step 5: Common: Totals posted, individuals separate. Step 6: Ex: Cash book balanced, others totals only.

18. Illustrate Journal Proper entries for adjustments.

8 Marks Answer: Step 1: Depreciation: Dr. Dep. Exp. 5,000 Cr. Asset 5,000. Step 2: Bad debt: Dr. Bad Debt 3,000 Cr. Debtor 3,000. Step 3: Format: Date, particulars, amounts. Step 4: Post to ledgers. Step 5: Narration: "Year-end adjustment". Step 6: Ensures completeness.

19. Prepare combined cash book for mixed transactions.

8 Marks Answer: Step 1: Transactions: Cash receipt 20,000, bank payment 15,000, contra 10,000. Step 2: Enter columns. Step 3: Balance each. Step 4: Table with totals. Step 5: Posting non-contra. Step 6: Verify equality.

20. Discuss role of special books in trial balance preparation.

8 Marks Answer: Step 1: Totals from books to nominal ledgers. Step 2: Individual postings to personal ledgers. Step 3: Balances extracted for trial. Step 4: Ex: Sales book total Cr. Sales. Step 5: Ensures debits=credits. Step 6: Subsidiary control accounts.

Tip: Practice formats; step-wise posting; examples balance.

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