A ledger is a book containing accounts that records all business transactions. It allows the transfer of transactions from journals into separate accounts. The document discusses key aspects of ledgers including components like date, amount, particulars; examples of common ledger accounts; the T-format used; and the process of posting journal entries to ledger accounts. It also covers the meaning of debit and credit balances, preparation of trial balances to check the accuracy of accounts, and common types of accounting errors.
2. LEDGER
• A ledger in accounting refers to a book that contains
different accounts where records of transactions pertaining
to a specific account is stored. It is also known as the book
of final entry or principal book of accounts. It is a book
where all transactions either debited or credited are stored.
• A ledger account is a combination of all the ledgers and
contains information related to all the accounting activities
of an organisation.
• A ledger contains different components which include the
various transaction elements such as date, amount,
particulars and l.f (ledger folio). Individual transactions are
contained within a ledger account and are identified by a
transaction number or any other type of notation.
3. Following are some examples of ledger
accounts
1. Accounts receivable
2. Cash
3. Depreciation
4. Accounts payable
5. Salaries and wages
6. Revenue
7. Debt
8. Inventory
9. Stockholders’ equity
10. Office expenses
4. Ledger Format
• The ledger consists of two columns prepared
in a T format. The two sides of debit and
credit contain date, particulars, folio number
and amount columns. The ledger format is as
follows.
5. Ledger Posting
• The process of transferring entries from a
journal to the respective ledger accounts is
known as ledger posting. For this process,
first, the entries are recorded in journals and
then transferred to their respective ledger
accounts.
6. State the meaning of ‘Debit Balance’.
• Balancing of an account means ascertaining
the net effect of the transaction, i.e. the
difference between the debit and credit side
of the ledger account. Thus, when the debit
side of the ledger account exceeds the credit
side, the balancing figure is termed as Debit
Balance. All the assets, expenses and losses
show Debit Balance.
7. What do you mean by Credit Balance?
• When credit side of the ledger account
exceeds the debit side, then the balancing
figure is termed as Credit Balance. All
Liabilities, Incomes and Gains and Capital
show Credit Balance.
8. Questions
1) Transfer of a Journal entry from Journal to ledger.
2) Total of Debit side of an A/c is more than total of Credit
side of an A/c.
3) Page number of ledger.
4) A book of an account in which all ledger accounts are
maintained.
5) Left hand side of an account.
6) Right hand side of an account.
7) Types of accounts which are not balanced but
transferred to Trading A/c or Profit & Loss A/c.
8) Bound book of accounts.
9) An account where total of Purchases Book is posted.
10) A statement of accounts prepared from the balances of
ledger account.
9. (1) Transfer of a Journal entry from Journal to ledger- Posting
Explanation:
When a Journal entry is transferred or posted to the ledger account, this
process is known as posting. All the transactions are firstly recorded in the
Journal in the form of Journal entries and then transferred to their
respective ledger accounts.
(2) Total of Debit side of an A/c is more than total of Credit side of an A/c-
Debit Balance
Explanation:
When the total of debit side of an account is more than total of credit side
of that account, then the balancing figure is termed as debit Balance.
Balancing of an account means ascertaining the net effect of the
transaction, i.e. the difference between the debit and credit side of the
ledger account.
(3) Page number of ledger- Ledger Folio
Explanation:
Page number of a ledger account is known as Ledger Folio. It is the page
number or folio number of the page where the posting has been made
from the Journal. It is recorded in the L.F. column of the Journal.
10. (4) A book of an account in which all ledger accounts are maintained-
Ledger
Explanation:
A ledger is a book of accounts that contains all the ledger accounts
of the business, whether they are real, nominal or personal. All the
entries from Journal are posted to their respective ledger accounts.
(5) Left hand side of an account- Debit Side
Explanation:
All accounts are divided into two sides. An account is often called a
T-shape account, as it is in the T-shape format. The left side of an
account is called debit side and it is written as 'Dr.‘
(6) Right hand side of an account- Credit Side
Explanation:
Every account is divided into two sides. The right side of an account
is termed as credit side and it is written as 'Cr.'. It is often called a T-
shape account, as it is in the T-shape format.
11. (7) Types of accounts which are not balanced but transferred to Trading A/c or Profit &
Loss A/c- Nominal Accounts
Explanation:
Nominal accounts are the accounts that are not balanced and in order to close
these accounts, the balance is transferred to the Trading and Profit and Loss A/c.
Nominal accounts include all the accounts of income, gains, losses and expenses of
a firm. Nominal accounts are not balanced and these are closed by transferring the
balance to the Trading and Profit & Loss A/c.
(8) Bound book of accounts- Ledger
Explanation:
A ledger may be kept in the form of a bound register, cards or punched sheets in a
loose leaf binder. Hence, a ledger is also known as a bound book of accounts.
(9) An account where total of Purchases Book is posted- Purchases A/c
Explanation:
Total of Purchases Book is posted on the debit side of Purchases A/c. A Purchases
Book is a subsidiary book or a sub division of Journal. Thus, all the entries related
to the credit purchases of goods are first recorded in Purchases Book and then the
posting is made to the respective ledger accounts. Thus, Purchases A/c is the
account where the total of Purchases Book is posted.
(10) A statement of accounts prepared from the balances of ledger account- Trial
Balance
Explanation:
Trial Balance is a statement of accounts that is prepared from the balances of
ledger accounts. It is prepared in order to check the arithmetical accuracy of the
accounts. It shows the summary of debit and credit balances of all ledgers
accounts and helps in the preparation of financial statements of the business.
12. BASIS FOR COMPARISON JOURNAL LEDGER
Meaning The book in which all the
transactions are recorded,
as and when they arise is
known as Journal.
The book which enables to
transfer all the transactions
into separate accounts is
known as Ledger.
What is it? It is a subsidiary book. It is a principal book.
Also known as Book of original entry. Book of second entry.
Record Chronological record Analytical record
Process The process of recording
transactions into Journal is
known as Journalizing.
The process of transferring
entries from the journal to
ledger is known as Posting.
How transactions are
recorded?
Sequentially Account-wise
Debit and Credit Columns Sides
Narration Must Not necessary.
Balancing Need not to be balanced. Must be balanced.
13. Trial Balance
• Trial Balance is a statement which accounts all the balances
of the Personal account, Real account, and Nominal
account regardless of either Revenue or Capital A/c. It
comprises 2 columns viz., debit and credit. If the
transactions are documented systematically by providing
dual-sided effect and later posted methodically, then the
total of both the columns would be similar.
• In other words, a trial balance is a worksheet record book
that reflects the debit and credit balance of all the
registered accounts. This worksheet statement is used to
prepare the final account report of the company. Trial
balance also determines the accuracy of the account.
However, it doesn’t ensure that the account is error-free
but surely gives mathematical precision.
14. Objectives of Preparing the Trial
Balance
• 1. To determine the financial efficiency of the ledger accounts- The trial balance
helps to keep a record all the credit and debit transactions properly in the ledger
and to check if the accounts have been balanced correctly. If both the balance is
correct, then it is assumed that the record of the trial balance is correct.
• 2. To help in the rectification of errors- Whenever the trial balance does not tally
management should know that there is at least one error in the accounting
process. Few errors that occur are.
• Subsidiary book total
• Recording journal entries in a ledger
• Account balance calculation
• Transferring account balance to the trial balance
• Trial balance total
• 3. To help in the formation of the financial statements- To prepare a financial
statement, the final tallied trail balance is required. Here, all expense and revenue
account registered in the trial balance is carried to the profit and loss account, and
all liabilities, assets, and capital account is carried to the balance sheet.
15. Preparation of Trial Balance
• There are three ways in which a trial balance can be prepared.
• 1. Total Method- In this method, the total balance of the credit and
debit is determined in an individual column and displayed in the
trial balance. Both the column’s total should be equal as it is based
on the double-entry system.
• 2. Balances Method- This method is used widely and is prepared by
determining the balance of all the ledger account and then
summing up the debit and credit total of the trial balance to ensure
accuracy.
• 3. Total-cum-balance Method- This method is the amalgamation of
both the total and balance method. In this method, four columns
for the amount is made. Two for writing credit and debit totals and
the other two for credit and debit balance of the account.
16. Classification of Errors
1. Errors of Commission: Errors due to the wrong posting of transactions to
the ledger, wrong totaling of accounts, wrong balancing of accounts, the
wrong casting of the day books, or wrong recording of the amount in the
journal or the day books are errors of commission. These are of clerical
nature and mostly affect the trial balance.
2. Errors of Omission: The error of omission usually occurs at the time of
recording a transaction in the journal or subsidiary books or at the time
of posting to the ledger. These are of two types, error of complete
omission and error of partial omission.
3. Compensating Errors: When the net effect of two or more errors is nil,
these are Compensating errors. These do not affect the trial balance.
4. Errors of Principle: We record the journal entry of the transactions as
per the accounting conventions and principles. The errors resulting due
to the violation of these are errors of principle. A wrong classification of
expenditure or income between capital and revenue is an error of
principle.
17. Account Title L.F Debit Balance (₹) Credit Balance (₹)
Capital
Buildings and Land
Machinery and Plant
Equipment
Fixtures and Furniture
Cash in Hand
Cash at Bank
Debtors
Receivable Bills
Raw Materials Stocks
Finished Goods Stocks
Purchases
Carriage Inwards
Carriage Outwards
Sales
Sales Return
Purchases Return
Interest Paid
Commission / Discount
Received
Salaries
Long Term Loan
Bills Payable
Creditors
Advances from Customers
Drawings
DR
DR
DR
DR
DR
DR
DR
DR
DR
DR
DR
DR
DR
DR
DR
DR
CR
OVERDRAFT(Cr)
CR
CR
CR
CR
CR
CR
CR
Total = =
18. LEDGER NUMERICALS
2017 (₹)
March 1 Shyam Sunder & Sons commenced business with cash 80,000
2 Purchased goods for cash 36,000
3 Machinery purchased for cash 4,000
4 Purchased goods from :
Raghu 22,000
Dilip 30,000
6 Returned goods to Raghu 4,000
8 Paid to Raghu, in full settlement of his account 17,500
10 Sold goods to Mahesh Chand & Co. for ₹ 32,000 at 5% trade discount
13 Received cash from Mahesh Chand & Co. 19,800
Discount allowed 200
15 Paid cash to Dilip 14,850
Discount received 150
20 Sold goods for cash 25,000
24 Sold goods for cash to Sudhir Ltd. 18,000
25 Paid for Rent 1,500
26 Received for Commission 2,000
28 Withdrew by Proprietor for his personal use 5,000
28 Purchased a fan for Proprietor's house 1,200
19. Date Particulars L.F.
Debit Am
ount (Rs)
Credit Amo
unt (Rs)
2017
Mar. 01 Cash A/c Dr. 80,000
To Capital A/c 80,000
(Business started with cash)
Mar. 02 Purchases A/c Dr. 36,000
To Cash A/c 36,000
(Goods purchased for cash)
Mar. 03 Machinery A/c Dr. 4,000
To Cash A/c 4,000
(Machinery purchased for cash)
Mar. 04 Purchases A/c Dr. 52,000
To Raghu’s A/c 22,000
To Dilip’s A/c 30,000
(Goods purchased on credit from Raghu and Dilip)
Mar. 06 Raghu’s A/c Dr. 4,000
To Purchases Return A/c 4,000
(Goods returned to Raghu)
20. Mar. 08 Raghu’s A/c Dr. 18,000
To Cash A/c 17,500
To Discount Received A/c 500
(Cash paid to Raghu in full settlement)
Mar. 10 Mahesh Chand & Co. Dr. 30,400
To Sales A/c 30,400
(Goods sold to Mahesh Chand & Co. at trade discount)
Mar. 13 Cash A/c Dr. 19,800
Discount Allowed A/c 200
To Mahesh Chand & Co. 20,000
(Cash received from Mahesh Chand & Co.)
Mar. 15 Dilip’s A/c Dr. 15,000
To Cash A/c 14,850
To Discount Received A/c 150
(Cash paid to Dilip)
21. Mar. 20 Cash A/c Dr. 25,000
To Sales A/c 25,000
(Goods sold for cash)
Mar. 24 Cash A/c Dr. 18,000
To Sales A/c 18,000
(Goods sold for cash)
Mar. 25 Rent A/c Dr. 1,500
To Cash A/c 1,500
(Rent paid)
Mar. 26 Cash A/c Dr. 2,000
To Commission A/c 2,000
(Commission received)
Mar. 28 Drawings A/c Dr. 6,200
To Cash A/c 6,200
(Cash withdrawn and fan purchased for personal
use)
TOTAL 3,12,100 3,12,100
27. Raghu’s Account
Dr. Cr.
Date Particulars J.F. Amount (Rs) Date Particulars J.F. Amount (Rs)
2017 2017
Mar.06 Purchases Return A/c 4,000 Mar.04 Purchases A/c 22,000
Mar.08 Cash A/c 17,500
Discount Received A/c 500
22,000 22,000
28. Purchases Return Account
Dr. Cr.
Dates
Particular
s
J.F.
Amount
(Rs)
Date
Particular
s
J.F. Amount (Rs)
2017 2017
Mar.31
Balance
c/d
4,000 Mar.06
Raghu’s
A/c
4,000
4,000 4,000
2017
Apr.01
Balance
b/d
4,000
29. Discount Received Account
Dr.
C
r
.
Date Particulars
J
.
F
.
Am
ount
(Rs)
D
a
t
e
Particulars
J
.
F
.
A
m
o
u
nt
(
R
s)
201
7
2
0
1
7
Mar.
31
Balance c/d 650
M
a
r.
0
8
Raghu’s A/c
5
0
0
M
a
r.
1
5
Dilip’s A/c
1
5
0
650
6
5
0
2
0
1
7
A
p
r.
0
1
Balance b/d
6
5
0
30. 1.From the following balances, taken from the books of M/s Dwarka
Parshad & Sons as at 31st March 2017, prepare a Trial Balance in proper
form :−
Name of Accounts (₹) Name of Accounts (₹)
Cash in Hand 4,500 Machinery 24,000
Bank Overdraft 8,000 Land & Buildings 50,000
Opening Stock 20,000 Debtors 18,400
Purchases 80,000 Creditors 8,500
Purchases Returns 2,000 Bills Receivable 2,850
Sales 1,30,000 Bills Payable 1,650
Sales Returns 5,000 Capital 60,000
Travelling Expenses 1,800 Drawings 6,000
Discount Allowed 600 Rent 3,700
Discount Received 1,500 Salaries 3,600
Loan (Cr.) 10,000
Interest on Loan 1,200
31. ANS -Books of Sh. Dwarka Prashad
Trial Balance
as on March 31, 2017
Name of Accounts L.F.
Debit
Balance
(Rs)
Credit
Balance
(Rs)
Cash in Hand 4,500
Overdraft 8,000
Opening Stock 20,000
Purchases 80,000
Purchases Return 2,000
Sales 1,30,000
Sales Return 5,000
Travelling Expenses 1,800
Discount Allowed 600
Discount Received 1,500
Machinery 24,000
Land & Building 50,000
Debtors 18,400
Creditors 8,500
Bills Receivable 2,850
Bills Payable 1,650
Capital 60,000
Drawings 6,000
Rent 3,700
Salary 3,600
Loan 10,000
Interest on Loan 1,200 –
Total 2,21,650 2,21,650
32. Q.2-Prepare a Trial Balance from the
following balances as at 31st March
2017 :−
(₹) (₹)
Stock on 1-4-2016 28,800 Returns Inwards 7,500
Purchases 82,000 Returns Outwards 5,600
Sales 1,60,00
0
Carriage Inwards 1,640
Wages 16,160 Carriage Outwards 3,200
Salaries 6,400 Furniture 12,000
Repair Charges 500 Motor Car 80,000
Commission
Received
800 Cash in Hand 4,700
Sundry Debtors 24,200 Bank Overdraft 25,400
Sundry Creditors 7,300 Investments 20,000
Capital 90,000 Interest on
Investments
2,400
Drawings 4,400
33. A-3.Trial Balance
as on March 31, 2017
Stock 28,800
Purchases 82,000
Sales 1,60,000
Salary 6,400
Repair Charges 500
Wages 16,160
Commission Received 800
Sundry Debtors 24,200
Sundry Creditors 7,300
Capital 90,000
Drawings 4,400
Return Inwards 7,520
Return Outwards 5,600
Carriage Inwards 1,640
Carriage Outwards 3,200
Furniture 12,000
Motor Car 80,000
Cash In Hand 4,700
Bank Overdraft 25,400
Investment 20,000
Interest on Investment 2,400
Total 2,91,500 2,91,500
34. Q.4-Prepare a Trial Balance from the following
balances taken as at 31st March 2017 :−
(₹) (₹)
Capital 2,50,000 Purchases 2,15,300
Drawings 24,000 Sales 3,80,000
Debtors 57,000 Miscellaneous Expenses 8,200
Creditors 28,500 Miscellaneous Receipts 3,600
Land & Building 1,80,000 Bad Debts 7,100
Plant 1,20,000 Bills Receivable 5,000
Stock on 1-4-2016 22,800 Loan from X 20,000
Factory Expenses 16,600 Interest on X's Loan 3,000
Office Expenses 7,700 Cash in hand 8,400
Purchases Return 6,000 Goodwill 10,000
Stationery 500
Freight 2,500
35. Trial Balance
as on March 31, 2017
Name of Accounts L.F.
Debit
Balance
(Rs)
Credit
Balance
(Rs)
Capital 2,50,000
Drawings 24,000
Debtors 57,000
Creditors 28,500
Land & Building 1,80,000
Plant 1,20,000
Stock on 1-4-2007 22,800
Factory Expenses 16,600
Office Expenses 7,700
Purchases Return 6,000
Stationery 500
Freight 2,500
Purchases 2,15,300
Sales 3,80,000
Miscellaneous Expenses 8,200
Miscellaneous Receipts 3,600
Bad Debts 7,100
Bills Receivable 5,000
Loan from X 20,000
Interest on X’s Loan 3,000
Cash 8,400
Goodwill 10,000
Total 6,88,100 6,88,100
36. • From the following ledger balances prepare
trial balance :
Capital ₹ 20,800, Rent outstanding ₹ 1,420,
Amount due to Param, ₹ 15,000, Drawing ₹
2,800, Goodwill ₹ 12,000, Interest received ₹
2,000, Discount received ₹ 1,580, Amount due
from Deepan ₹ 26,000.
37. A-4.Trial Balance
Name of Accounts L.F.
Debit
Balance
(Rs)
Credit
Balance
(Rs)
Capital 20,800
Outstanding Rent 1,420
Due to Param 15,000
Drawings 2,800
Goodwill A/c 12,000
Interest Received 2,000
Discount Received 1,580
Due from Deepan 26,000
Total 40,800 40,800
38. MCQ -1
• A ledger is called a book of.
• (a) Primary entry
• (b) Final entry
• (c) Original entry
• (d) None of the above
39. ANS MCQ -1
• A ledger is called a book of.
• (a) Primary entry
• (b) Final entry
• (c) Original entry
• (d) None of the above
40. MCQ -2
• 2. From which of the following is a ledger
account prepared.
• (a) Transactions
• (b) Journal
• (c) Events
• (d) None of the above
41. ANS -MCQ -2
• 2. From which of the following is a ledger
account prepared.
• (a) Transactions
• (b) Journal
• (c) Events
• (d) None of the above
42. MCQ –3
• 3.The process of transferring of items from a
journal to their respective ledger accounts is
called as.
• (a) Entry
• (b) Arithmetic
• (c) Balancing
• (d) Posting
43. ANS -MCQ –3
• 3.The process of transferring of items from a
journal to their respective ledger accounts is
called as.
• (a) Entry
• (b) Arithmetic
• (c) Balancing
• (d) Posting
44. MCQ -4
• 4. The ledger column that links the entry with
the journal is called as.
• (a) J.F column
• (b) L.F column
• (c) Credit column
• (d) Debit column
45. ANS -MCQ -4
• 4. The ledger column that links the entry with
the journal is called as.
• (a) J.F column
• (b) L.F column
• (c) Credit column
• (d) Debit column
46. MCQ -5
• 5. The left hand side of the ledger account is
referred to as.
• (a) Footing
• (b) Credit side
• (c) Debit side
• (d) Balance
47. ANS -MCQ -5
• 5. The left hand side of the ledger account is
referred to as.
• (a) Footing
• (b) Credit side
• (c) Debit side
• (d) Balance
48. MCQ -6
• 6. Ledger is a principal book that contains.
• (a) Real accounts only
• (b) Personal accounts only
• (c) All accounts
• (d) Nominal accounts only
49. ANS -MCQ -6
• 6. Ledger is a principal book that contains.
• (a) Real accounts only
• (b) Personal accounts only
• (c) All accounts
• (d) Nominal accounts only
50. MCQ -7
• 7. Accounts that have credit balance are
closed by using the statement.
• (a) By balance b/d
• (b) By balance c/d
• (c) To balance b/d
• (d) To balance c/d
51. ANS – MCQ 7
• 7. Accounts that have credit balance are
closed by using the statement.
• (a) By balance b/d
• (b) By balance c/d
• (c) To balance b/d
• (d) To balance c/d
52. MCQ -8
• 8. An account is having debit balance is
established when.
• (a) The last entry of the accounting period was
posted on the debit side
• (b) The amount of debit exceeds the amount
of the credits
• (c) There are more entries on the debit side
than on the credit side
• (d) None of above
53. ANS MCQ -8
• 8. An account is having debit balance is
established when.
• (a) The last entry of the accounting period was
posted on the debit side
• (b) The amount of debit exceeds the amount
of the credits
• (c) There are more entries on the debit side
than on the credit side
• (d) None of above
54. MCQ -9
• 9. Which of the following item will be
appearing on the credit side of the ledger
account?
• (a) Discount received
• (b) Cash received
• (c) Rent Expenses
• (d) Purchases
55. ANS MCQ -9
• 9. Which of the following item will be
appearing on the credit side of the ledger
account?
• (a) Discount received
• (b) Cash received
• (c) Rent Expenses
• (d) Purchases
56. MCQ -10
• 10. Among these, which item is used as the
base for preparing trial balance?
• (a) Cash account
• (b) Balance sheet
• (c) Journal
• (d) Ledger account
57. ANS -MCQ -10
• 10. Among these, which item is used as the
base for preparing trial balance?
• (a) Cash account
• (b) Balance sheet
• (c) Journal
• (d) Ledger account
58. MCQ 11
• Trial balance is used to check the accuracy of
(a) Balance sheet balances
(b) Ledger accounts balances
(c) Cash flow statement balances
(d) Income statement balances
59. MCQ 11
• Trial balance is used to check the accuracy of
(a) Balance sheet balances
(b) Ledger accounts balances
(c) Cash flow statement balances
(d) Income statement balances
60. MCQ 1
• What kind of accuracy is tested by Trial
balance-
(a) Theoretical
(b) Practical
(c) Arithmetical
(d) None of these.
61. ANS-MCQ 1
• What kind of accuracy is tested by Trial
balance-
(a) Theoretical
(b) Practical
(c) Arithmetical
(d) None of these.
62. MCQ - 2
• How many methods are there for preparing
Trial Balance –
(a) One
(b) Three
(c) Four
(d) None of these.
63. ANS -MCQ - 2
• How many methods are there for preparing
Trial Balance –
(a) One
(b) Three
(c) Four
(d) None of these.
64. MCQ -3
• Which of the following is prepared on the
basis of Trial Balance –
(a) Journal
(b) Ledger
(c) Final Accounts
(d) None of these.
65. ANS -MCQ -3
• Which of the following is prepared on the
basis of Trial Balance –
(a) Journal
(b) Ledger
(c) Final Accounts
(d) None of these.
66. MCQ -4
• Of the two sides of Trial balance does not tally,
which Account is opened –
(a) Suspense Account
(b) Personal Account
(c) Real Account
(d) None of these.
67. ANS -MCQ -4
• Of the two sides of Trial balance does not tally,
which Account is opened –
(a) Suspense Account
(b) Personal Account
(c) Real Account
(d) None of these.
68. MCQ -5
• Errors Committed by omitting entries in the
Journal book is called –
(a) Error of commission
(b) Error of principle
(c) Error of omission
(d) None of these.
69. ANS -MCQ -5
• Errors Committed by omitting entries in the
Journal book is called –
(a) Error of commission
(b) Error of principle
(c) Error of omission
(d) None of these.
70. MCQ 6
• If the trial balance does not tally after many
efforts then following Account is opened –
(a) Purchase account
(b) Suspense account
(c) Sales account
(d) None of these
71. ANS -MCQ 6
• If the trial balance does not tally after many
efforts then following Account is opened –
(a) Purchase account
(b) Suspense account
(c) Sales account
(d) None of these
72. MCQ -7
• Errors committed due to lack of basis principle
of Accounting are called –
(a) Compensating errors
(b) Error of principle
(c) Single sided error
(d) None of these.
73. ANS -MCQ -7
• Errors committed due to lack of basis principle
of Accounting are called –
(a) Compensating errors
(b) Error of principle
(c) Single sided error
(d) None of these.
74. MCQ 8
• Closing stock appears outside the trial
balance.
A. True
B. False
75. ANS -MCQ 8
• Closing stock appears outside the trial
balance.
A. True
B. False
76. MCQ 9
• A trial balance is not a conclusive proof of
accounting accuracy.
A. True
B. False
77. ANS -MCQ 9
• A trial balance is not a conclusive proof of
accounting accuracy.
A. True
B. False
78. MCQ -10
• Trial balance is a part of ledger.
A. True
B. False
81. ANS -MCQ -11
• Suspense Account is a Permanent Account.
A. True
B. False
82. MCQ 12
• 1. Trial balance is used to check the accuracy
of
• A) Balance sheet balances
• B) Ledger accounts balances
• C) Cash flow statement balances
• D) Income statement balances
83. ANS -MCQ 12
• 1. Trial balance is used to check the accuracy
of
• A) Balance sheet balances
• B) Ledger accounts balances
• C) Cash flow statement balances
• D) Income statement balances
84. MCQ 13
• 2. In the books of account if a transaction is
completely deleted, will it affect the trial
balance?
• A) No
• B) Yes
• C) A transaction cannot be omitted
85. ANS -MCQ 13
• 2. In the books of account if a transaction is
completely deleted, will it affect the trial
balance?
• A) No
• B) Yes
• C) A transaction cannot be omitted
86. MCQ -14
• 3. What is used in preparing trial balance?
• A) Specialised Journals
• B) Balance Sheet
• C) Ledger Accounts
• D) General Journal
87. ANS -MCQ -14
• 3. What is used in preparing trial balance?
• A) Specialized Journals
• B) Balance Sheet
• C) Ledger Accounts
• D) General Journal
88. MCQ 15
• 4. What is the trial balance used?
• A) It is a financial statement
• B) It records balances of a balance sheet
• C) It doesn’t contribute to the accounting
cycle
• D) It records balances of accounts
89. ANS -MCQ 15
• 4. What is the trial balance used?
• A) It is a financial statement
• B) It records balances of a balance sheet
• C) It doesn’t contribute to the accounting
cycle
• D) It records balances of accounts
90. MCQ 16
• 5. When debit balance is equal to credit balance
then the trial balance means
• A) Account balances are correct
• B) Mathematically Capital+Liabilities=Assets
• C) No mistake in recording transactions
• D) No mistake in posting entries to ledger
accounts
•
91. ANS -MCQ 16
• 5. When debit balance is equal to credit balance
then the trial balance means
• A) Account balances are correct
• B) Mathematically Capital+Liabilities=Assets
• C) No mistake in recording transactions
• D) No mistake in posting entries to ledger
accounts
•
92. MCQ -17
• 6. When is trial balance prepared?
• A) At the end of an accounting period
• B) At the end of a year
• C) Frequently during the year
• D) At the end of a month
93. ANS MCQ -17
• 6. When is trial balance prepared?
• A) At the end of an accounting period
• B) At the end of a year
• C) Frequently during the year
• D) At the end of a month
94. MCQ -18
• Which of the following account with normal
balance is shown at the debit side of a trial
balance?
• A) Creditors account
• B) Unearned income account
• C) Rent income account
• D) Cash account
95. ANS -MCQ -18
• Which of the following account with normal
balance is shown at the debit side of a trial
balance?
• A) Creditors account
• B) Unearned income account
• C) Rent income account
• D) Cash account
Notas del editor
It is regarded as the most important book in accounting as it helps in creating a trial balance that acts as a precursor to the preparation of financial statements.
The information stored in a ledger account contains both starting and ending balances which are adjusted during the course of the accounting period with respective debits and credits.