LEDGER CALLED KING OF ALL BOOKS
In ledger various accounts are posted from journal, so it is called king of all books.
ADVANTAGES OF THE LEDGER
- Ledger provides better information, to management to increase income and decrease losses of the business.
- From it financial position of the business is known.
Business transactions are recorded first of all in journal and then recorded
from it into ledger. This process is called posting.
It is very useful in business. Debit and credit balance are recorded in trial balance.
Balance is ascertained from the debit and credit side of an account.
BALANCING OF AN ACCOUNT
When difference of an account is allocated from its total is called balancing of account
KINDS OF LEDGER
- General Ledger 2. Debtor’s ledger 3. Creditor’s ledger.
In these ledgers, all transactions are posted whom goods and services are provided on credit.
In these ledgers, all transactions are posted from whom goods and service are buying on credit.
All information about assets, expenses, incomes and gains of the business are recorded in general ledger.
If debit side of an account is more than credit side its balance is known as debit balance. Assets and expenses have debit balance.
If credit side of an account is higher than debit side, it is known as credit balance. Liabilities and Income have credit balance.
When both sides of an account are equal itself is called zero balance. It is not transferred to trial balance.
SUB DIVISION OF LEDGER
In a large size of organization sub division of ledger is needed.
The page number of ledger is written in journal and page number of journal is written in ledger is called folioing.
METHOD OF PREPARING A TRIAL BALANCE
Trial balance is prepared by following two methods i. Total Balance ii. Balance method.
BETTER KIND OF PREPARING A TRIAL BALANCE
Balance method is better because it provides true screen of a business, but total balance method is complicated to understand.
Following Multiple Choice Questions (MCQs) are related with Ledger and Trial Balance. You will find below 28 Multiple Choice Questions (MCQs) with Answers.
Choose Accounting Topics for MCQs with Answers
- Introduction to Accounting
- Accounting Equation
- Nature of Accounts – Rules of Debit and Credit
- Ledger and Trial Balance
- Banking Transactions
- Sub-Division of Journal – Cash Book and Petty Cash Book, Receipts & Payment Journal
- Bank Reconciliation Statement – BRS
- Bills of Exchange
- Capital and Revenue Expenditures
- Rectification of Errors
- Final Accounts with Adjustment
- Work Sheet
- Single Entry Book-Keeping System
- Non-Trading Concerns
- Partnership Accounting
- Consignment Accounts
- Joint Venture Accounts
- Company Accounts
- Provisions and Reserves
- Branch Accounting
- Departmental Accounting
- Contract Accounts
- Hire Purchase and Installments