Tag: elements of book keeping and accountancy

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

This is NOT the function of ledger.

  1. To classify all the items

  2. To put all the items at application accounts

  3. Both a & b

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

Classifying items and maintaining application accounts are both fundamental functions of the ledger. Therefore, none of the options provided are 'NOT' a function.

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

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

  1. Information regarding debtors

  2. Every information is provided with narration

  3. Information regarding creditors

  4. Information regarding purchases
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Ledgers do not contain narrations. Narrations are written in the journal to explain the nature of the transaction.

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

Function of the ledger is _____________.

  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
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The ledger's primary function is to summarize all transactions related to a specific account, providing a clear view of that account's status.

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

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

  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
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A debit balance occurs in an account when the total of the debit side is greater than the total of the credit side.

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

Cash book is a form of _____________.

  1. Trial balance

  2. Ledger

  3. Journal

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

A cash book is a specialized journal that records all cash receipts and payments. Because it serves the function of both a journal and a ledger (as it acts as the cash account), it is classified as a ledger.

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

Ledger is an account book in which ______________.

  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
Reveal answer Fill a bubble to check yourself
C Correct answer
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.

Multiple choice elements of book keeping and accountancy introduction to book keeping and accounting meaning and classification of business transactions develop the understanding of recording of transactions in journal illustrations on journal entries

When one existing company takes over the business of another company or companies, it is _____________.

  1. Amalgamation

  2. Absorption

  3. Internal Reconstruction

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

Amalgamation means merger of two or more companies and forming of altogether a new company.

In case of absorption, the company which is taking over(buying company) remains while one is taken over(selling company) dissolves.

Multiple choice elements of book keeping and accountancy bank reconciliation statement understand the concept of bank reconciliation statemen bank balance, bank overdraft, meaning, and bank reconciliation statement accounting records

The debit balance of the bank account as per the cash book should be equal to the credit balance of the account of the business in the books of the bank. 

  1. True

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

True. 

The debit balance of the cash book (bank column) should be equal to the credit balance in the account of the business in the books of the bank (pass book/ bank statement). This is because, pass book (bank statement) is a copy of the customer's account in the books of bank from the point of view of the bank. So our debit balance is shown as credit balance by them.