(i) Simple Journal Entry
(ii) Compound Entry
(iii) Opening Entry

(i) A debit note is prepared by the buyer and it contains the date of the goods returned, name of the supplier, details of the goods returned and reasons for returning the goods.
(ii) Each debit note is serially numbered.
(iii) A duplicate copy or counterfoil of the debit note is retained by the buyer.

(i) Accounting equation is a mathematical expression which shows that the total of assets is equal to the total of liabilities and capital.
(ii) This is based on the dual aspect concept of accounting.
(iii) This means that total claims of outsiders and the proprietor will always be equal to the total of assets of business enterprise.
Assets = Liabilities + Capital + Revenues - Expenses

(i) Source documents are the authentic financial evidence of transactions. These documents show the nature of transaction, the date, the amount and the parties involved.
(ii) Source documents include cash receipt, invoice, debit note, credit note, pay-in-slip, salary bills, wage bills, counterfoils of cheques and any other form of written document proof.

a) Capital A/c - Personal Account
b) Drawings A/c - Personal Account
c) Machinery A/c  - Real Account
d) Purchases A/c - Real Account
e) Wages A/c - Nominal Account
f) Bank A/c - Personal Account
g) Outstanding Rent A/c - Personal Account
h) Prepaid Insurance A/c - Personal Account
i) Bad Debts A/c - Nominal Account

There are two approaches for recording business transactions, namely,
i) Accounting equation approach and
ii) Traditional approach
(i) Accounting Equation approach :
(a) The relationship of assets with that of liabilities to outsiders and to owners in the equation form is known as accounting equation.
(b) Under the Double entry system of book keeping, every transaction has two fold effects, which causes the changes in assets and liabilities or capital in such a way that an accounting equation is completed and equated
Equity + Liabilities =Assets
(ii) Traditional approach :
(a) Under this approach, the two fold aspects (Debit and Credit) in each transaction are recorded in the journal under double entry system.
(b) For the purpose of recording, the transactions are classified into three categories as
i) Transactions relating to persons,
ii) Transactions relating to assets, properties and liabilities and
iii) Transactions relating to expenses, losses, incomes and gains.

Following are the principles of double entry system:
(i) In every business transaction, there are two aspects
(ii) The two aspects involved are the benefit or value receiving aspect and benefit or value giving aspect.
(iii) These two aspects involve minimum two accounts; at least one debit and at least one credit.
(iv) For every debit, there is a corresponding and equivalent credit. If one account is debited the other account must be credited.

(i) Double entry system of book keeping is a scientific and complete system of recording the financial transactions of an organisation.
(ii) According to this system, every transaction has a two fold effect.
(iii) That is, there are two aspects involved, namely, receiving aspect and giving aspect.
(iv) It is denoted by debit (Dr.) and credit (Cr.).
Following are the advantages of double entry system:
(1) Accuracy: In this system, the two aspects of each transaction are recorded in the books of accounts.This helps in checking the accuracy in accounting
(2) Ascertainment of business results: Details regarding expenses, losses, incomes, gains, assets, liabilities, debtors, creditors, etc: are readily available. This helps to ascertain the net profit earned or loss incurred during an accounting period and also to know the financial position as on a particular date.
(3) Comparative study: The business results of the current year can be compared with those of the previous years and also with other business firms. It facilitates business planning for future.
(4) Common acceptance: The business records maintained under this system are accepted by financial institutions, government and others, because it is a systematic and scientific system.

The following steps are followed in journalising
(1) Analyse the transactions and identify the accounts (based on aspects) which are involved in the transaction.
(2) Classify the above accounts under Personal account, Real account or Nominal account
(3) Apply the rules of debit and credit for the above two accounts.
(4) Find which account is to be debited and which account is to be credited by the application of rules of double entry system.
(5) Record the date of transaction in the date column.
(6) Enter the name of the account to be debited in the particulars column very close to the left hand side of the particulars column followed by the abbreviation 'Dr.' at the end in the same line. Against this, the amount to be debited is entered in the debit amount column in the same line.
(7) Write the name of the account to be credited in the second line starting with the word 'To' prefixed a few spaces away from the margin in the particulars column. Against this, the amount to be credited is entered in the credit amount column in the same line.
(8) Write the narration within brackets in the next line in the particulars column.