Tag: ledgers

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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

Ledger is book for _________________.

  1. Analytical record

  2. Chronological record

  3. Alphabetical record

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

The ledger provides an analytical record by grouping transactions into specific accounts, allowing for the analysis of individual items.

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

On 1st April, 2012 in Sethi's Ledger, furniture account showed a balance of Rs. 2,00,000. On 1st October, 2012 Sethi purchased new furniture by paying Rs. 5,000 and giving old furniture whose book value on 1st April, 2012 was Rs. 12,000 to the seller. Sethi provides depreciation on furniture @ 10% per annum on diminishing balance method. The net value of furniture in Sethi's books as on 31st March, 2013 would be:

  1. Rs. 1,85,080

  2. Rs. 1,83,960

  3. Rs. 1,84,780

  4. Rs. 2,04,400
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Cost of new asset purchased
Cash paid $ = 5,000$
Old asset given up $ = 11,400$
(12,000-600) $= 16,400$

Depreciation
(i) $ (2,00,000 - 12,0(0) \times$  10% = 18,800
(ii) 16,400 x 10% x 6/12 = 820
(iii) $18800 + 820$  = 19,620

Balance as per furniture A/c - 2,00,000
Cost of new asset purchased -5,000
Less: depreciation $=$ 19,620
Less: depreciation $=$ 600
12000 x 10% x 6/12
Net value of furniture  $ = $ 184780

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 ledger is made _____________.

  1. to classify all items appearing in Journal

  2. to record the transaction

  3. Both (a) and (b)

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

Ledger sorts out all the entries in journal under appropriate accounts for example all transactions related to cash are put in one account.

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

Posting is ___________________.

  1. The process of displaying results in balance sheet

  2. The process of displaying results in profit and loss account

  3. The process of recording the transactions in journal

  4. The process of recording the transactions in ledger
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Posting is the process of transferring entries from the journal (book of original entry) to the respective 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

Pick out the wrong one from the following statements.

  1. In ledger account debit is one left hand side and credit on right hand side.

  2. Ledger takes care of only real and nominal accounts of an enterprise.

  3. Name of the account in ledger is written in the top middle of the account.

  4. Ledger account is divided into two sides.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The ledger takes care of all types of accounts: personal, real, and nominal. The statement claiming it only takes care of real and nominal is incorrect.

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

What is uncommon in ledger?

  1. Name of the accounts used in journal are different from ledger

  2. Account which is credited in journal debited in ledger

  3. Both a & b

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

The account names are the same in both journal and ledger, and the debit/credit relationship is preserved (a credit in the journal is posted to the credit side of the ledger account). Thus, both A and B are false statements, making C the correct choice for 'what is uncommon'.

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.