Commerce Accountancy

Accounting Principles and Practices

2,416 Questions

Accounting principles and practices involve the preparation of trial balances, ledgers, and bank reconciliation statements. This area tests your knowledge of fundamental accounting concepts and routine business transactions. It is a core section in commerce exams and various competitive tests.

Ledger accountsTrial balance preparationBank reconciliation statementAccounting conceptsPrimary books of accounts

Accounting Principles and Practices Questions

Multiple choice elements of book keeping and accountancy ledger and posting distinction between subsidiary books and ledger explain the meaning of ledger posting methods of posting entries

Right hand side of an account is __________.

  1. credit side

  2. debit side

  3. income side

  4. expenses side
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

All the accounts identified on the basis of transactions recorded in different journals/books such as Cash Book, Purchase Book, Sales Book etc. will be opened and maintained in a separate book called Ledger. So a ledger book; in which all types of accounts relating to assets, liabilities, capital, expenses and revenues are maintained. It is a complete set of accounts of a business enterprise. 

A ledger account has two sides, namely left hand and right hand side. Left hand side is called the debit side while the right hand side is called the credit side.

Multiple choice elements of book keeping and accountancy ledger and posting distinction between subsidiary books and ledger explain the meaning of ledger posting methods of posting entries

Recording of an entry from journal to ledger is called as __________.

  1. Balancing

  2. Posting

  3. Totalling

  4. Transferring
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The process of recording transactions in the journal is called Journalizing. Once journalizing process is completed, the journal entry provides a complete and useful description of the event's effect on the organisation. 


The process of transferring journal entry to individual accounts is called posting. 

Multiple choice elements of book keeping and accountancy ledger and posting distinction between subsidiary books and ledger explain the meaning of ledger posting methods of posting entries

Ledger posting is made before passing journal entry.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Ledger posting is made after recording the journal entries in the book of original entry. Once the transactions are recorded in the journal, theses are transferred or posted to the relevant ledger accounts. 

Thus, ledger posting is done after passing the journal entry.

Multiple choice elements of book keeping and accountancy ledger and posting distinction between subsidiary books and ledger explain the meaning of ledger posting methods of posting entries

All entries are posted from journal to _______.

  1. ledger

  2. balance sheet

  3. trial balance

  4. cash A/c
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The first step involves identifying the transactions to be recorded and preparing the source documents which are in turn recorded in the basic book of original entry called journal and are then posted to individual accounts in the principal book called ledger. 


The process of transferring journal entry to the individual accounts is called posting. 
This sequence causes the journal to be called the Book of Original Entry and the ledger account is the Principal Book of Entry.

Multiple choice elements of book keeping and accountancy ledger and posting distinction between subsidiary books and ledger explain the meaning of ledger posting methods of posting entries

____________ is a process of transferring journal entry to ledger.

  1. Journalisation

  2. Ledger Posting

  3. Casting

  4. Recording
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Posting is the process of transferring the entries from the books of original entry (journal) to the ledger. In other words, posting means grouping of all the transactions in respect to a particular account at one place for meaningful  conclusion and to further the accounting process. Positing from the journal is done periodically, may be, weekly or fortnightly or monthly as per the requirements and convenience of the business. 

Multiple choice elements of book keeping and accountancy ledger and posting distinction between subsidiary books and ledger explain the meaning of ledger posting methods of posting entries

Recording of a transaction in journal is called posting.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Ledger posting means making entries of the transactions in the ledger books from the journals. Posting is a process of transferring debit and credit aspects of the entries appearing in the journal and other books of original entry to the debit and credit sides of the relevant accounts in the ledger. 

Posting means transferring the entries from the Journal to the Ledger accounts. Recording of a transaction in the Journal is termed as Journalising. Thus, when entries are posted or transferred to the respective ledger accounts, this process is termed as posting.

Multiple choice elements of book keeping and accountancy ledger and posting distinction between subsidiary books and ledger explain the meaning of ledger posting methods of posting entries

Recording business transaction in the journal is known as posting.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Journalising is the process of recording the aspects of the transactions in journal. In other words, recording of entries in the journal is known as journalising. 

The process of journalising means the steps to be followed for ascertaining the account heads to be debited/credited for a particular transaction. There are three steps involved in the process of journalising a transaction:
Step 1: Identification of accounts or 'account heads' affected by the transaction.
Step 2: Classification of accounts or account heads.
Step 3: Application of rules for debit and credit.

Multiple choice elements of book keeping and accountancy ledger and posting distinction between subsidiary books and ledger explain the meaning of ledger posting methods of posting entries

Cash purchase of raw material is initially recorded in_________.

  1. purchase day book

  2. cash book

  3. directly in Purchase A/c

  4. any of the above three
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

All cash transactions are first recorded in cash book. Hence cash purchase of raw material is also to be recorded in cash book.

Multiple choice elements of book keeping and accountancy ledger and posting distinction between subsidiary books and ledger explain the meaning of ledger posting methods of posting entries

A summary record of the changes in a particular asset, liability or owners equity is known as _________.

  1. Account

  2. Account current

  3. Proforma Account

  4. Ledger
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The detailed record of all the changes that have occurred in a particular asset, liability, or owner's equity during a period is known as account. It is a record or statement of financial expenditure and receipts relating to a particular period or purpose.

Multiple choice elements of book keeping and accountancy ledger and posting distinction between subsidiary books and ledger explain the meaning of ledger posting methods of posting entries

The transferring of amount from the journal to the appropriate accounts in the ledger is called _________.

  1. Recording

  2. Journalising

  3. Journal entry

  4. Posting
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

All journal entries must be transferred to a book to have the summary of each account. The book where these individual account are opened is called ledger. Process of transferring the entries from journal to ledger is called posting.

Multiple choice elements of book keeping and accountancy ledger and posting distinction between subsidiary books and ledger explain the meaning of ledger posting methods of posting entries

Total of Bills Payable Book is posted to the ledger ___________.

  1. on the debit side of bills payable A/c

  2. on the credit side of bills payable A/c

  3. Either (a) or (b)

  4. None of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The total of “Bills Payable Book” shows the total amount of bills accepted, which is posted on the Credit side of “Bills Payable Account”. Bills Payable are liability for business. Thus, show credit balance.

Multiple choice elements of book keeping and accountancy ledger and posting distinction between subsidiary books and ledger explain the meaning of ledger posting methods of posting entries

The process of transferring the debit and credit items from a journal to their respective accounts in the ledger is termed as _______________.

  1. posting

  2. purchase

  3. balancing of an account

  4. arithmetical accuracy test
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Posting is the accounting process of transferring entries from the journal to the ledger accounts. This organizes financial data by specific accounts.

Multiple choice elements of book keeping and accountancy ledger and posting distinction between subsidiary books and ledger explain the meaning of ledger posting methods of posting entries

The process of transferring the transactions relating to changes in a particular item at one place in the form of an account is called _________.

  1. journalising

  2. balancing

  3. posting

  4. casting
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Posting is the process of grouping all transactions related to a specific item into one place, which is known as an account in the ledger.

Multiple choice elements of book keeping and accountancy ledger and posting distinction between subsidiary books and ledger explain the meaning of ledger posting methods of posting entries

Posting refers to the process of transferring information from _________.

  1. journal to ledger accounts

  2. general ledger accounts to journals

  3. source documents to journals

  4. journals to source documents
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Posting is the process of transferring the entries from the book of original entry (journal) to the ledger. In other words, posting means grouping of all the transactions in respect to a particular account at one place for meaningful conclusion and for further accounting process. Posting from the journal is done periodically, may be, weekly or fortnightly or monthly as per the requirements and convenience of the business.

Multiple choice elements of book keeping and accountancy ledger and posting distinction between subsidiary books and ledger explain the meaning of ledger posting methods of posting entries

The following relate to the recording process. Which of these statements is correct_________.

  1. The general ledger is a chronological record, of transactions.

  2. The general ledger is posted from transactions recorded in the general journal.

  3. The trial balance provides the primary source document for recording transactions into the general journal

  4. Transposition is the transfer of information from the general journal to the general ledger.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

After the transactions are recorded in these journals, a summary of all the transactions is posted in each journal to the general ledger, which contains all of a company's accounts. An account is a separate, detailed record associated with a specific asset, liability, equity, revenue, or expense item.