00:01
Okay, so let us understand the solution from the example.
00:08
But before that, okay, but before that we will draw our accounting cycle.
00:16
Accounting cycle depicts that there are series of events after the financial transaction execution.
00:29
There is a series of events through which every financial transaction goes through and reaches the destination of its barrenuate.
00:36
However this seems very very traditional okay but still it is the case in accounting as a subject okay now let's start our process first of all in any business entity there is a financial transaction which involves finance which involves money because before recording everything before preparing financial statements there needs to be a financial transaction which is to be recorded first of all so this this is the first step please write it down to so that you can you can revise it before exams or you know sometimes whenever anyone asks from you so financial transaction then what happens when there is a financial transaction how to keep a record of it there is a voucher okay there is a voucher it's like a received received just a general receipt type type of it's a paper form received so every financial transaction executed will be recorded on that paper form received okay now after financial transaction there is a recording of transaction because until and unless a financial transaction will be recorded the financial transaction executed will be of no worth to entity because it has been not recorded so there will be no proof of financial transaction in the business okay and how do we record it? where do we record it? let's also understand.
02:28
I'm going to rub this out, okay, to make a clean diagram.
02:37
So we record in journal.
02:41
Followed by that after preparing, after recording a series of financial transactions, okay, a series of financial transaction.
02:53
We post, we post them to different types of t accounts or t accounts we can say ledgers.
03:08
Okay.
03:10
Now what happens in the ledgers? let's suppose we have 100 of financial transaction.
03:15
These will be recorded in the journal, 100 transactions.
03:19
Followed by that, we will post those hundred financial transactions to ledgers.
03:27
A ledgers in a form of, you can also take it as a diagram.
03:32
I'm just making a bracket.
03:35
This is a ledger form.
03:37
Like there is a debit, there is a debit...