Tag: elements of book keeping and accountancy

Questions Related to elements of book keeping and accountancy

Recording of a transaction in journal is called posting.

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

  1. True

  2. False

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Correct Option: B
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.

Ledger Folio is recorded in Journal.

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

  1. True

  2. False

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Correct Option: A
Explanation:

Ledger folio is the page number or folio number that is recorded in the L.F. column in the Journal. 

This column indicates the page number of the ledger book on which the relevant account appears, It is not filled at the time of journalising but at the time of posting the transactions.

Recording business transaction in the journal is known as posting.

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

  1. True

  2. False

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Correct Option: B
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.

With the help of journal and ledger, cross checking of business transactions not possible.

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

  1. True

  2. False

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Correct Option: B

Cash purchase of raw material is initially recorded in_________.

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

  1. purchase day book

  2. cash book

  3. directly in Purchase A/c

  4. any of the above three

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Correct Option: B
Explanation:

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

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

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

  1. Account

  2. Account current

  3. Proforma Account

  4. Ledger

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Correct Option: A
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.

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

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

  1. Recording

  2. Journalising

  3. Journal entry

  4. Posting

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Correct Option: D
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.

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

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

  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

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Correct Option: B
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.

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

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

  1. posting

  2. purchase

  3. balancing of an account

  4. arithmetical accuracy test

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Correct Option: A

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

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

  1. journalising 

  2. balancing

  3. posting

  4. casting

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Correct Option: C