Tag: elements of book keeping and accountancy

Quizzes (38) Questions (832)

Questions Related to elements of book keeping and accountancy

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

Left hand side of an account is ________.

  1. Debit side

  2. Credit side

  3. Income side

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

Debt and credit are two important terms used in Book-keeping and Accountancy. These two terms form the very basis of recording transactions in the books of accounts. 

Left hand side of the account is called debit side. Hence, to debit an account means to record the transaction on the left hand side of the account. It is abbreviated as 'Dr.' The word 'debit' is originated from the Latin word 'Debitum' and it means what is due.
Whenever an asset increases, or equity or a liability decreases, a debit entry will be made in the appropriate account. Whenever an asset decreases, or equity or a liability increases, a credit entry will be made in the appropriate account. the difference between the two sides of an account can be calculated. This difference is called the balance of an account.

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

Transferring journal entry from journal to ledger is called journalising. 

  1. True

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

The process of recording transaction in the book of original entry is known as Journalising. The transactions are recorded in the form of a journal entry. Recording is made following the double-entry system of accounting. Thus, it records the two-fold effect of every transaction in the process of journalising, the transaction is first analysed in order to decide the account to be debited and credited by ascertaining the rule of debit and credit. After this, entries are recorded in the books of accounts. Once the entry is recorded in books, it is further posted from the journal to the ledger accounts which is called posting of entries.

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

Brokerage paid on sale of goods is debited to Brokerage A/c.

  1. True

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

Brokerage is a fee or commission paid to a broker who is engaged in business in buying or selling shares and securities. 

Hence, it is an indirect expense for a business that is to be accounted under Brokerage A/c. 
Being an expense for the business, it should be debited to Profit and Loss A/c, according to the rule of nominal account.

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 accounting entries passed to transfer balance from the closed account to another account are called transfer entries, e.g. transfer of net profit to Capital A/c.

  1. True

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

Transfer entries, are entries intended to transfer an item from one head of account to another. 

Transfer entries are passed in the journal for transferring an account from one account to another account. E.g. Drawing account is transferred to Capital account at the end of the accounting year. Accounts relating to operation of business like sales, income, expenses are closed at the end of the year and their total or balances are transferred to Trading and Profit and Loss Account after recording journal entries.

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.