Journal, Ledger & Trial Balance – Short Questions with Answers
Q.1. WHAT YOU MEAN BY JOURNAL?
Ans. Word journal is derived from French word “Jour” which means day. Business transactions are recorded in journal daily, that’s why it is called “Day Book”. Transactions are recorded Chronologically in Journal. It is Also Called “Book of Original Entry” or ” Book of Prime Entry”.
Q.2. WHAT IS ENTRY?
Ans. When transactions are recorded in journal that is called entry.
Q.3. DEFINE NARRATION OF AN ENTRY?
Ans. Short detail of each entry in journal is called narration.
Q.4. DEFINE JOURNALIZING?
Ans. Journalizing means recording of business transactions in journal or made journal entry.
Q.5. WRITE THE KINDS OF ACCOUNTS?
Ans. There are three kinds of Account.
- Real A/C ii. Personal A/C iii. Nominal A/C
Q.6. DEFINE REAL ACCOUNT?
Ans. Real accounts are that things which are not sale. These are helpful for business like machinery, building, furniture etc.
Q.7. DEFINE PERSONAL ACCOUNT?
Ans. A business deals with bank, Companies and peoples for buying and selling is called Personal Accounts.
Q.8. DEFINE NOMINAL ACCOUNTS?
Ans. All expenses, losses, gains, profit and Income of the business are called nominal accounts like Salary to workers, Rent of Building, and discount etc.
Q.9. WRITE THE RULES OF DEBIT AND CREDIT FOR “REAL ACCOUNTS”?
Ans. When Assets are increased will be debited. When assets are decreased will be credited in the business.
Q.10. WRITE THE RULES OF DEBIT AND CREDIT FOR “PERSONAL ACCOUNTS”?
Ans. The receiver person is debited and the giver persons is credited.
Q.11. WRITE THE RULES OF DEBIT AND CREDIT FOR NOMINAL ACCOUNTS?
Ans. All expenses and losses of business are debited and Revenue, Profit and gains are credited.
Q.12. WHY IS THE JOURANL CALLED THE BOOK OF ORIGINAL ENTRY?
Ans. All the transactions of a business are recorded first of all in the Journal so it is called the book of original entries.
Q.13. WHY IS THE JOURANAL CALLED DAY BOOK?
Ans. Every transaction of a business is recorded chronologically in journal so it is called day book.
Q.14. WHY IS THE JOURANL CALLED THE SUBSIDIARY BOOK?
Ans. Because, all the accounts of a business are prepared from Journal, so it is called subsidiary book.
Q.15. DEFINE COMPOUND ENTRY?
Ans. That transaction which has more than two accounts is called compound entry. In it one account is debit and others credit or one credit and others debit.
Q.16. WHAT IS CAPITAL ACCOUNT?
Ans. The name of the owner in business is not recorded. Only Capital Account is used for him.
Q.17. WHAT IS DRAWINGS?
Ans. When proprietor takes goods or cash from business his name is not recorded, only drawings accounts is shown.
Q.18 WRITE A NOTE ON LEDGER?
Ans. In business all accounts have their separate page is called ledger.
Q.19 DEFINE POSTING?
Ans. Business transactions are recorded first of all in journal and then recorded From it into ledger. This process is called posting.
Q.20. WHAT IS TRIAL BALANCE?
Ans. It is very useful in business. Debit and credit balance are recorded in trial balance.
Q.21 WHY IS THE LEDGER CALLED KING OF ALL BOOKS?
Ans. In ledger various accounts are posted from journal, so it is called king of all books.
Q.22 WRITE TWO ADVANTAGES OF THE LEDGER?
Ans. 1.Ledger provides better information, to management to increase income and decrease losses of the business.From it financial position of the business is known.
Q.23 DEFINE BALANCE?
Ans. Balance is ascertained from the debit and credit side of an account.
Q.24 WHAT IS MEANT BY BALANCING OF AN ACCOUNT?
Ans. When difference of an account is allocated from its total is called balancing of account
Q.25 NAME THE KINDS OF LEDGER?
Ans. 1. General Ledger 2. Debtor’s ledger 3. Creditor’s ledger.
Q.26 DEFINE DEBTOR,S LEDGER?
Ans. In these ledgers, all transactions are posted whom goods and services are provided on credit.
Q.27 DEFINE CREDITOR,S LEDGER?
Ans. In these ledgers, all transactions are posted from whom goods and service are buying on credit.
Q.28 DEFINE GENERAL LEDGER?
Ans. All information about Assets, Expenses, Incomes and gains of the business are recorded in general ledger.
Q.29 DEFINE DEBIT BALANCE?
Ans. If debit side of an account is more than credit side its balance is known as debit balance. Assets and expenses have debit balance.
Q.30 DEFINE CREDIT BALANCE?
Ans. If credit side of an account is higher than debit side, it is known as credit balance. Liabilities and Income have credit balance.
Q.31 WHAT IS MEANT BY ZERO BALANCE?
Ans. When both sides of an account are equal is called zero balance. It is not transferred To trial balance.
Q.32 WHEN SUB DIVISION OF LEDGER NEEDED?
Ans. In a large size of organization sub division of ledger is needed.
Q.33 WHAT IS FOLIOING?
Ans. The page number of ledger is written in journal and page number of journal is written in ledger is called folioing.
Q.34 WRITE THE NAME OF METHOD OF PREPARING A TRIAL BALANCE?
Ans. Trial balance is prepared by following two methods i. Total Balance ii. Balance method.
Q.35 WHICH IS BETTER KIND OF PREPARING A TRIAL BALANCE?
Ans. Balance method is better because it provides true screen of a business, but total balance method is complicated to understand.