Tag: ledgers

Questions Related to ledgers

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 $2$

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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

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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

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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.

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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

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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

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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

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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

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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

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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.