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Ledgers - class-IX

Description: ledgers
Number of Questions: 35
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Tags: accountancy accounting books and statements accounting and its terminology ledger-posting elements of accounts ledger and posting recording of transactions - i ledger elements of book keeping and accountancy accounting records accounting in business commercial applications recording of business transactions commercial studies business studies
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It is a check on the accuracy of posting. If the trial balance agrees it proves that - 
1. The books are arithmetically accurate 
2. Both the aspects of the transactions have correctly recorded in the books of original entry as well as in the ledger. 
The correct answer is ___________________.

elements of book keeping and accountancy ledger and posting explain the concept of ledger and its importance in accounting process. introduction to ledgers ledgers

  1. $1$ but not $2$

  2. $2$ but not $1$

  3. Both $1$ & $2$

  4. Either $1$ or $2$

Show answer
Correct Option: C

Which of the following involves the preparation of reports and statements from the classified data (ledger) understandable and useful to management and other interested parties? 

elements of book keeping and accountancy ledger and posting explain the concept of ledger and its importance in accounting process. introduction to ledgers ledgers

  1. Classifying

  2. Recording

  3. Summarizing

  4. All of the above

Show answer
Correct Option: C

Ledger book is popularly known as ____________.

elements of book keeping and accountancy ledger and posting explain the concept of ledger and its importance in accounting process. introduction to ledgers ledgers

  1. Secondary book of accounts

  2. Principal book of accounts

  3. Subsidiary book of accounts

  4. None of above

Show answer
Correct Option: B

At the end of the accounting year all the nominal accounts of the ledger book are ______________________.

elements of book keeping and accountancy ledger and posting explain the concept of ledger and its importance in accounting process. introduction to ledgers ledgers

  1. Balanced but not transferred to profit and loss account .

  2. Not balanced and also the balance is not transferred to the profit and loss account.

  3. Balanced and the balance is transferred to the balance sheet.

  4. Not balanced and their balance is transferred to the profit and loss account.

Show answer
Correct Option: D

The total of the amount of the bills receivable book is posted to the _______in the ledger. 

elements of book keeping and accountancy ledger and posting explain the concept of ledger and its importance in accounting process. introduction to ledgers ledgers

  1. Dr. of bills payable account

  2. Cr. of bills payable account

  3. Cr. of bills receivable account

  4. Dr. of bills receivable account

Show answer
Correct Option: C

The total of the amount of the bills payable book is posted to the _____ in the ledger.

elements of book keeping and accountancy ledger and posting explain the concept of ledger and its importance in accounting process. introduction to ledgers ledgers

  1. Dr. of bills payable account

  2. Cr. of bills payable account

  3. Cr. of bills receivable account

  4. Dr. of bills receivable account

Show answer
Correct Option: B

At the end of the accounting year all the nominal accounts of the ledger book are _________________.

elements of book keeping and accountancy ledger and posting explain the concept of ledger and its importance in accounting process. introduction to ledgers ledgers

  1. Balanced but not transferred to profit and loss account

  2. Not balanced and also the balance is not transferred to the profit and loss account

  3. Balanced and the balance is transferred to the balance sheet

  4. Not balanced and their balance is transferred to the profit and loss account

Show answer
Correct Option: D

Credit creation power of the commercial banks gets limited by which of the following?

elements of book keeping and accountancy ledger and posting explain the concept of ledger and its importance in accounting process. introduction to ledgers ledgers

  1. Banking habits of the people

  2. Cash Reserve Ratio

  3. Credit policy of the central bank

  4. All of the above

Show answer
Correct Option: D

Which of the following statements best explains the relationship between journal and ledger?

elements of book keeping and accountancy ledger and posting explain the concept of ledger and its importance in accounting process. introduction to ledgers ledgers

  1. First recording in journal and then positing to ledger completes the double entry of the transaction

  2. The journal is the book of original entry, where as the ledger is the book of second entry

  3. The journal is the book for analytical record and ledger is the book for chronological record

  4. The process of recording, in the journal is called journalising, the process of recording in the ledger is called posting

Show answer
Correct Option: B
Explanation:

Book of original entry refers to journal where all the business transactions are recorded first in chronological order whereas ledger is a book which records all journal entries in individual ledger account. 

Ledger Folio and index is necessary for ledger.

elements of book keeping and accountancy ledger and posting explain the concept of ledger and its importance in accounting process. introduction to ledgers ledgers

  1. True

  2. False

Show answer
Correct Option: A
Explanation:

A ledger folio is the page number or folio number that is recorded in the L.F. column in the journal. It includes the page number of the ledger book on which the relevant account appears. 

An index is the list of all ledger accounts that is maintained in alphabetical order, indicating the page number of each ledger account. 
A ledger book contains various pages and an index helps in finding out any ledger account. Therefore, the ledger folio and index are necessary for a ledger.

A bound book of account is __________.

elements of book keeping and accountancy ledger and posting explain the concept of ledger and its importance in accounting process. introduction to ledgers ledgers

  1. Ledger

  2. Journal

  3. Subsidiary Book

  4. Cash Book

Show answer
Correct Option: A
Explanation:

The ledger is the principal book of accounting system. It contains different accounts where transactions relating to that account are recorded. A ledger is the collection of all the accounts, debited or credited, in the journal proper and various special journal.  

It is very useful and is of utmost importance in the organisation. 
The net result of all transactions in respect of a particular account om a given date can be ascertained only from the ledger.

_________ is concerned with the classification process of Accounting.

elements of book keeping and accountancy ledger and posting explain the concept of ledger and its importance in accounting process. introduction to ledgers ledgers

  1. Ledger

  2. Preparation of profit and loss a/c

  3. Journalising

  4. Balancing of leger

Show answer
Correct Option: A
Explanation:

Once the business transactions are recorded in journal, this has to be posted in ledger. Posting of transaction in a ledger depends on the nature of transaction. Hence this is very much desired to have a proper classification of ledger. This may be classified in the form of personal ledger and impersonal ledger. 

A transaction recorded on the credit side of cash book is transferred to the ledger _______________.

elements of book keeping and accountancy ledger and posting explain the concept of ledger and its importance in accounting process. introduction to ledgers ledgers

  1. On debit side of the account

  2. On credit side of the account

  3. Is not posted anywhere

  4. Either (a) or (b).

Show answer
Correct Option: A
Explanation:

Rules regarding posting of cash book are given below: (i) Transactions recorded on the debit side of cash book are posted on the credit side of accounts opened in the ledger. (ii) Transactions recorded on the credit side of the cash book are posted on the debit side of different accounts in the ledger.

Balance of cash book is posted to the ledger ______________.

elements of book keeping and accountancy ledger and posting explain the concept of ledger and its importance in accounting process. introduction to ledgers ledgers

  1. In the cash account

  2. In bank account

  3. Nowhere

  4. Either (a) or (b).

Show answer
Correct Option: C
Explanation:

A cash book is a financial journal that contains all cash receipts and disbursements, including bank deposits and withdrawals. Entries in the cash book are then posted into the general ledger.

Main object of preparing a Ledger is ____________.

elements of book keeping and accountancy ledger and posting explain the concept of ledger and its importance in accounting process. introduction to ledgers ledgers

  1. to ascertain the debtors and creditors of the business

  2. to ascertain the financial position of the business

  3. to ascertain the profit or loss of the business

  4. to ascertain the collective effect of all transactions pertaining to a particular account

Show answer
Correct Option: D

In the ledger only __________ accounts are maintained.

elements of book keeping and accountancy ledger and posting explain the concept of ledger and its importance in accounting process. introduction to ledgers ledgers

  1. personal

  2. real

  3. nominal

  4. all of the above

Show answer
Correct Option: D

Cash account will show ______________.

elements of book keeping and accountancy ledger and posting explain the concept of ledger and its importance in accounting process. introduction to ledgers ledgers

  1. Debit or Credit balance

  2. a Credit balance

  3. a Debit balance

  4. None of the above

Show answer
Correct Option: C

Ledger book is popularly known as _________.

elements of book keeping and accountancy ledger and posting explain the concept of ledger and its importance in accounting process. introduction to ledgers ledgers

  1. secondary book of accounts

  2. principal book of accounts

  3. subsidiary book of accounts

  4. none of the above

Show answer
Correct Option: B

_________ is the principal book of accounts where similar transactions relating to a particular person or property or revenue or expense are recorded.

elements of book keeping and accountancy ledger and posting explain the concept of ledger and its importance in accounting process. introduction to ledgers ledgers

  1. Ledger

  2. Journal

  3. Purchases returns books

  4. Sales book

Show answer
Correct Option: A

Ledger is the ____ of accounts where similar transactions relating to a particular person or property or revenue or expense are recorded.

elements of book keeping and accountancy ledger and posting explain the concept of ledger and its importance in accounting process. introduction to ledgers ledgers

  1. Principal book

  2. Primary entry book

  3. Third entry book

  4. None of above

Show answer
Correct Option: A

Ledger is book for _________________.

elements of book keeping and accountancy ledger and posting explain the concept of ledger and its importance in accounting process. introduction to ledgers ledgers

  1. Analytical record

  2. Chronological record

  3. Alphabetical record

  4. None of above

Show answer
Correct Option: A

On 1st April, 2012 in Sethi's Ledger, furniture account showed a balance of Rs. 2,00,000. On 1st October, 2012 Sethi purchased new furniture by paying Rs. 5,000 and giving old furniture whose book value on 1st April, 2012 was Rs. 12,000 to the seller. Sethi provides depreciation on furniture @ 10% per annum on diminishing balance method. The net value of furniture in Sethi's books as on 31st March, 2013 would be:

elements of book keeping and accountancy ledger and posting explain the concept of ledger and its importance in accounting process. introduction to ledgers ledgers

  1. Rs. 1,85,080

  2. Rs. 1,83,960

  3. Rs. 1,84,780

  4. Rs. 2,04,400

Show answer
Correct Option: C
Explanation:

Cost of new asset purchased
Cash paid $ = 5,000$
Old asset given up $ = 11,400$
(12,000-600) $= 16,400$

Depreciation
(i) $ (2,00,000 - 12,0(0) \times$  10% = 18,800
(ii) 16,400 x 10% x 6/12 = 820
(iii) $18800 + 820$  = 19,620

Balance as per furniture A/c - 2,00,000
Cost of new asset purchased -5,000
Less: depreciation $=$ 19,620
Less: depreciation $=$ 600
12000 x 10% x 6/12
Net value of furniture  $ = $ 184780

A ledger is made _____________.

elements of book keeping and accountancy ledger and posting explain the concept of ledger and its importance in accounting process. introduction to ledgers ledgers

  1. to classify all items appearing in Journal

  2. to record the transaction

  3. Both (a) and (b)

  4. None of these

Show answer
Correct Option: A
Explanation:

Ledger sorts out all the entries in journal under appropriate accounts for example all transactions related to cash are put in one account.

What is NOT required for ledger?

elements of book keeping and accountancy ledger and posting explain the concept of ledger and its importance in accounting process. introduction to ledgers ledgers

  1. Data

  2. Using 'To' and 'By'

  3. In folio column page number of journal

  4. None of the above

Show answer
Correct Option: D

Posting is ___________________.

elements of book keeping and accountancy ledger and posting explain the concept of ledger and its importance in accounting process. introduction to ledgers ledgers

  1. The process of displaying results in balance sheet

  2. The process of displaying results in profit and loss account

  3. The process of recording the transactions in journal

  4. The process of recording the transactions in ledger

Show answer
Correct Option: D

Pick out the wrong one from the following statements.

elements of book keeping and accountancy ledger and posting explain the concept of ledger and its importance in accounting process. introduction to ledgers ledgers

  1. In ledger account debit is one left hand side and credit on right hand side.

  2. Ledger takes care of only real and nominal accounts of an enterprise.

  3. Name of the account in ledger is written in the top middle of the account.

  4. Ledger account is divided into two sides.

Show answer
Correct Option: B

What is uncommon in ledger?

elements of book keeping and accountancy ledger and posting explain the concept of ledger and its importance in accounting process. introduction to ledgers ledgers

  1. Name of the accounts used in journal are different from ledger

  2. Account which is credited in journal debited in ledger

  3. Both a & b

  4. None of the above

Show answer
Correct Option: C

Book of analytical record is ___________.

elements of book keeping and accountancy ledger and posting explain the concept of ledger and its importance in accounting process. introduction to ledgers ledgers

  1. Balance sheet

  2. Journal

  3. Ledger

  4. All of the above

Show answer
Correct Option: C

This is NOT the function of ledger.

elements of book keeping and accountancy ledger and posting explain the concept of ledger and its importance in accounting process. introduction to ledgers ledgers

  1. To classify all the items

  2. To put all the items at application accounts

  3. Both a & b

  4. None of the above

Show answer
Correct Option: D

The information that is not provided in the ledger is a _______________.

elements of book keeping and accountancy ledger and posting explain the concept of ledger and its importance in accounting process. introduction to ledgers ledgers

  1. Information regarding debtors

  2. Every information is provided with narration

  3. Information regarding creditors

  4. Information regarding purchases

Show answer
Correct Option: B

Function of the ledger is _____________.

elements of book keeping and accountancy ledger and posting explain the concept of ledger and its importance in accounting process. introduction to ledgers ledgers

  1. to calculate the total debit and credit of the company

  2. to prepare the summary of each account

  3. to record all the transactions in a period.

  4. All of the above

Show answer
Correct Option: B

If there is a debit balance in ledger accounts than ___________.

elements of book keeping and accountancy ledger and posting explain the concept of ledger and its importance in accounting process. introduction to ledgers ledgers

  1. debit side of an account exceeds the credit side

  2. credit side of an account exceeds the debit side

  3. total of the debit side is more

  4. both a & c

Show answer
Correct Option: A

Ledger is a book of _________.

elements of book keeping and accountancy ledger and posting explain the concept of ledger and its importance in accounting process. introduction to ledgers ledgers

  1. original entry

  2. all cash transactions

  3. secondary entry

  4. all non-cash transactions

Show answer
Correct Option: B

Cash book is a form of _____________.

elements of book keeping and accountancy ledger and posting explain the concept of ledger and its importance in accounting process. introduction to ledgers ledgers

  1. Trial balance

  2. Ledger

  3. Journal

  4. All of the above

Show answer
Correct Option: B

Ledger is an account book in which ______________.

elements of book keeping and accountancy ledger and posting explain the concept of ledger and its importance in accounting process. introduction to ledgers ledgers

  1. only real accounts are opened

  2. only real and personal accounts are opened

  3. all the real, personal and nominal accounts are opened

  4. None of the above

Show answer
Correct Option: C
Explanation:

Business transactions are first entered in Journal or Special Purpose Subsidiary Books. The next step is to transfer the entries to respective accounts in ledger. In other word, all entries recorded in journal or special purpose subsidiary books are classified and in order to ascertain the position of a particular account, all transactions relating to that particular account are collected at one place in the ledger. In short, a ledger is a book which contains all accounts of the business enterprise whether Real, Personal or Nominal. Ledger is called the "Principal Book'. It is also called the book of final entry because the transactions which are first entered in journal or subsidiary books are finally incorporated in the ledger.

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