Ledger Account in Accountancy| Accounting MCQs
Read this information about Ledger account and Check the MCQs given on Ledger account.
A ledger account is a way to keep track of all the transactions related to a
specific category of items or expenses in a business. It's like a detailed
record book that lists all the money that comes in and goes out of that
particular category.
For example, let's say a business
sells different types of products. The business can create a separate ledger
account for each product to keep track of its sales and expenses. So, if the
business sells product A, all the sales related to product A will be recorded
in the ledger account for product A. Similarly, any expenses related to product
A, such as manufacturing costs or shipping costs, will also be recorded in the
same ledger account.
A ledger account consists of two
columns: a debit column and a credit column. Debit refers to the money that
goes out of the account, while credit refers to the money that comes into the
account. So, when a sale is made, it is recorded in the credit column of the ledger
account for that particular product. When an expense is incurred, it is
recorded in the debit column.
The ledger account provides a
detailed summary of all the transactions that have occurred in a particular
category of the business. It helps business owners and accountants to
understand the financial health of the business and make informed decisions.
Difference between Ledger and Journal Account
A journal is the first book of entry where transactions are initially
recorded in a chronological order. On the other hand, a ledger is a book that
contains all the accounts, both personal and impersonal, in which transactions
are classified and recorded.
In other words, a journal is a
record of all the transactions in the order in which they occur, while a ledger
is a collection of accounts that shows the effect of those transactions on
individual accounts. The journal provides a complete record of the transaction,
whereas the ledger provides a summary of the transaction for each account.
In simpler terms, the journal is
like a diary where transactions are first recorded in the order they occur,
while the ledger is like a collection of accounts, each representing a specific
aspect of the business such as cash, accounts receivable, accounts payable,
etc.
Check MCQs on ledger
account
What is the name of the ledger book that contains the
final entries of a business's transactions?
a. Original entry
b. Primary entry
c. Book of entries
d. Final entry
Answer: d
From which document is a ledger account typically
prepared?
a. Transactions
b. Journal
c. Events
d. None of the above
Answer: b
What term describes the process of transferring
information from a journal to its corresponding ledger account?
a. Entry
b. Arithmetic
c. Balancing
d. Posting
Answer: d
What is the name of the ledger column that links an entry
with its corresponding journal?
a. J.F column
b. L.F column
c. Credit column
d. Debit column
Answer: a
What term describes the left-hand side of a ledger
account?
a. Footing
b. Credit side
c. Debit side
d. Balance
Answer: c
Which types of accounts are typically included in a
ledger book?
a. Real accounts only
b. Personal accounts only
c. All accounts
d. Nominal accounts only
Answer: c
What statement is used to close accounts that have a
credit balance?
a. By balance b/d
b. By balance c/d
c. To balance b/d
d. To balance c/d
Answer: d
When is an account considered to have a debit balance?
a. When the last entry of the accounting period was posted
on the debit side
b. When the amount of debit exceeds the amount of the
credits
c. When there are more entries on the debit side than on the
credit side
d. None of the above
Answer: b
Which of the following items would appear on the credit
side of a ledger account?
a. Discount received
b. Cash received
c. Rent expenses
d. Purchases
Answer: a
What is used as the basis for preparing a trial balance?
a. Cash account
b. Balance sheet
c. Journal
d. Ledger account
Answer: d
What is another term for a book of ledgers?
a) Final entry
b) Primary entry
c) Original entry
d) None of the above
Answer: a) Final entry
Explanation: A book of ledgers is also known as a general
ledger or a "book of final entry." It records all of a company's
financial transactions, which are recorded as debits or credits, and verified
through a trial balance.
Which of the following is an example of a ledger account?
a) Events
b) Journal
c) Transactions
d) None of the above
Answer: b) Journal
Explanation: A ledger account is a detailed record of
financial transactions that includes all assets and liabilities, income, and
expenses. The journal is a book of original entry that records all transactions
before they are transferred to the ledger.
The process of transferring information from a journal to
its respective ledger account is called:
a) Balancing
b) Arithmetic
c) Entry
d) Posting
Answer: d) Posting
Explanation: Posting is the process of transferring
information from a journal to its respective ledger account. This helps to keep
track of individual accounts and ensure that all transactions have been
recorded accurately.
What is the name of the ledger column that links an entry
to the journal?
a) Credit column
b) L.F. column
c) J.F. column
d) Debit column
Answer: c) J.F. column
Explanation: The J.F. (journal folio) column is used in a
ledger account to link an entry to the journal. This helps to ensure that all
transactions are accurately recorded and accounted for.
What is the left side of a ledger account known as?
a) Debit side
b) Credit side
c) Footing
d) Balance
Answer: a) Debit side
Explanation: A ledger account consists of two sides: the
debit side and the credit side. The left side of the account is known as the
debit side, and it records all debits made to the account.
What types of accounts are recorded in the principal book
of ledger?
a) Real accounts only
b) Personal accounts only
c) Nominal accounts only
d) All accounts
Answer: d) All accounts
Explanation: The principal book of ledger, also known as the
general ledger, contains all accounts related to assets, liabilities, capital,
expenses, and revenues. It is a complete set of accounting records for a
business enterprise.
Which statement is used to close an account in the
ledger?
a) To/By balance B/D
b) Balance c/d
c) Balance b/d
d) To/By balance C/d
Answer: d) To/By balance C/d
Explanation: To balance c/d is used to close an account in
the ledger. It indicates that the closing balance has been transferred to the
next accounting period and helps to ensure that all accounts are accurately
balanced.
When does an account have a debit balance?
a) When the debit side has more entries than the credit side
b) When the debit amount exceeds the credit amount
c) When the last entry is made to the debit side for the
accounting period
d) None of the above
Answer: b) When the debit amount exceeds the credit amount
Explanation: An account has a debit balance when the total
of all debits exceeds the total of all credits. This indicates that there have
been more debits made to the account than credits.