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Ledger Test 3

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Ledger Test 3
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  • Question 1
    1 / -0
    Debtors and Creditors Ledgers are known as __________________.
    Solution
    A subsidiary ledger stores the details for a general ledger control account. Once information has been recorded in a subsidiary ledger, it is periodically summarized and posted to a control account in the general ledger, which in turn is used to construct the financial statements of a company. Most accounts in the general ledger are not control accounts; instead, individual transactions are recorded directly into them. Subsidiary ledgers are used when there is a large amount of transaction information that would clutter up the general ledger. This situation typically arises in companies with significant sales volume. Thus, there is no need for a subsidiary ledger in a small company. Examples of subsidiary ledgers are:
    1. Accounts payable ledger
    2. Accounts receivable ledger
    3. Fixed assets ledger
    4. Inventory ledger
    5. Purchases ledger
    Therefore, B is the correct option.
  • Question 2
    1 / -0
    Which of the following is not opened in the General Ledger ?
  • Question 3
    1 / -0
    Totalling of journal and ledger is called as_____. 
    Solution
    Casting means to add up or sum  up a column of figures. In accounts it is necessary to add the balances as the figures are useful in many ways. 
  • Question 4
    1 / -0
    The 'Statement of Affairs' is prepared on the basis of _______________.
  • Question 5
    1 / -0
    Right hand side of an account is __________.
    Solution
    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.
  • Question 6
    1 / -0
    All entries are posted from journal to _______.
    Solution
    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.
  • Question 7
    1 / -0
    ____________ is a process of transferring journal entry to ledger.
    Solution
    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. 
  • Question 8
    1 / -0
    Recording of an entry from journal to ledger is called as __________.
    Solution
    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. 

  • Question 9
    1 / -0
    A bound book of account is __________.
    Solution
    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.
  • Question 10
    1 / -0
    Left hand side of an account is called _______ side.
    Solution
    In double entry accounting, every transaction affects and is recorded in at least two accounts. 
    When recording each transaction, the total amount debited must be equal to the total amount credited. 
    In accounting, the terms debit and credit indicate whether the transactions are to be recorded on the left hand side or right hand side of the account. 
    Left hand side of an account is called as debit side and right hand side is known as credit side.
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