When it is necessary to analyse transactions in terms of debit and credit ?

While Journalizing.

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While Posting.

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At both times.

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None of the above.

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Solution

The correct option is B While Journalizing.
When the business transactions take place, the first step is to record the same in the books of original entry or subsidiary books or books of prime or journal. Thus, journal is a simple book of accounts in which all the business transactions are originally recorded in chronological order and from which they are posted to the ledger accounts at any convenient time. Journalisisng refers to the act of recording each transaction in the journal and the form in which its is recorded, is known as a journal entry.

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Similar questions

Describe how debits and credits are used to analyse transactions.

2019		₹
Jan. 1	Started business with cash	1,00,000
Jan. 3	Bought goods on credit from Gupta & Co., Delhi	20,000
Jan. 5	Cash sales	5,000
Jan. 8	Cash purchases	8,000
Jan. 10	Sold goods to Ahmed & Co., Lucknow	10,000
Jan. 11	Deposited cash in bank	50,000
Jan. 13	Purchased a computer for office	20,000
Jan. 15	Took a loan from Mehboob	70,000
Jan. 16	Goods returned by Ahmed & Co.	2,000
Jan. 17	Purchased furniture from Mehfil Mart, Kolkata	10,000
Jan. 18	Paid interest to Mehboob	2,000
Jan. 19	Received claim from Ahmed & Co. for defects in goods supplied to them. Claim was accepted and rebate was allowed.	1,000
Jan. 22	Paid rent by cheque	2,000
Jan. 24	Withdrew from bank	20,000
Jan. 25	Sales of goods at counter after allowing trade discount of 10%	10,000
Jan. 26	Goods purchased from Gupta & Co., Delhi were destroyed by accident	10,000
Jan. 27	Advertisement expenses paid through bank	5,000
Jan. 28	Ahmed & Co. settled their account by cheque	7,000
Jan. 29	Paid the due amount to Gupta & Co. by cheque after availing discount of ₹ 800
Jan. 31	Sold old newspapers	500

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