Tag: explain the concept of ledger and its importance in accounting process.

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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

A bound book of account is __________.

  1. Ledger

  2. Journal

  3. Subsidiary Book

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

The ledger is the principal book of accounting system. It contains different accounts where transactions relating to that account are recorded. A ledger is the collection of all the accounts, debited or credited, in the journal proper and various special journal.  

It is very useful and is of utmost importance in the organisation. 
The net result of all transactions in respect of a particular account om a given date can be ascertained only from the 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

_________ is concerned with the classification process of Accounting.

  1. Ledger

  2. Preparation of profit and loss a/c

  3. Journalising

  4. Balancing of leger
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Once the business transactions are recorded in journal, this has to be posted in ledger. Posting of transaction in a ledger depends on the nature of transaction. Hence this is very much desired to have a proper classification of ledger. This may be classified in the form of personal ledger and impersonal 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

A transaction recorded on the credit side of cash book is transferred to the ledger _______________.

  1. On debit side of the account

  2. On credit side of the account

  3. Is not posted anywhere

  4. Either (a) or (b).
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A Correct answer
Explanation

Rules regarding posting of cash book are given below: (i) Transactions recorded on the debit side of cash book are posted on the credit side of accounts opened in the ledger. (ii) Transactions recorded on the credit side of the cash book are posted on the debit side of different accounts in the 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

Balance of cash book is posted to the ledger ______________.

  1. In the cash account

  2. In bank account

  3. Nowhere

  4. Either (a) or (b).
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A cash book is a financial journal that contains all cash receipts and disbursements, including bank deposits and withdrawals. Entries in the cash book are then posted into the general 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

Main object of preparing a Ledger is ____________.

  1. to ascertain the debtors and creditors of the business

  2. to ascertain the financial position of the business

  3. to ascertain the profit or loss of the business

  4. to ascertain the collective effect of all transactions pertaining to a particular account
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The primary purpose of a ledger is to organize transactions by account, allowing one to see the collective effect of all transactions related to a specific person, asset, or expense.

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 book is popularly known as _________.

  1. secondary book of accounts

  2. principal book of accounts

  3. subsidiary book of accounts

  4. none of the above
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B Correct answer
Explanation

This is a duplicate of question 425065 with identical content but different capitalization. The ledger is called the Principal Book of Accounts because it contains all accounts in classified form and is the main reference for financial information.

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

_________ is the principal book of accounts where similar transactions relating to a particular person or property or revenue or expense are recorded.

  1. Ledger

  2. Journal

  3. Purchases returns books

  4. Sales book
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A Correct answer
Explanation

The ledger is the principal book of accounts where transactions from the journal are posted to specific accounts.

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 the ____ of accounts where similar transactions relating to a particular person or property or revenue or expense are recorded.

  1. Principal book

  2. Primary entry book

  3. Third entry book

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

The ledger is the principal book of accounts because it provides the final classification of all transactions.