Ch.# 4 LEDGER

Chapter # 4		LEDGER
Q.1:	Define Ledger?
Ans:	Any activity undertaken for the purpose of earning profit is called business.
Q.2:	Name any three classes of ledger?
Ans:	i)       Debtors ledgerii)    Creditors ledgeriii)  General ledger
Q.3:	What is posting?
Ans:	The process of transferring the business transaction from journal to ledger is known as posting.
Q.4:	What is “Balance”?
Ans:	The difference between the two dies of an account is called “Balance”.
Q.5:	What do you mean by “zero balance”?
Ans:	If the two sides of an account are equal, it shows “zero balance”.
Q.6:	What is closing balance?
Ans:	The balance on debit or credit side on the closing of any account is called closing balance.
Q.7:	What is meant by “debit balance”?
Ans:	If the debit side of an account is greater then credit side, the difference is known as debit balance.
Q.8:	What is meant by credit balance?
Ans:	If the credit side of an account is greater than debit side, then difference is known as credit balance.
Q.9:	What is “Folioing”?
Ans:	The process of entering the ledger page number in the “ledger folio column” of the journal and journal page number in the “Journal folio column” of the ledger is called “folioing”.
Q.10:	Define “Debtors ledger”?
Ans:	The book in which only all the customers / debtors accounts of business are posted is called debtors ledger.
Q.11:	Define “creditors ledger”?
Ans:	The book in which only all the creditors or suppliers accounts of business re posted is called creditors ledger.
Q.12:	Define General ledger?
Ans:	The ledger in which all the accounts are posted except debtors or creditors when debtors ledger or creditors ledger is prepare is called general ledger.
Q.13:	Why we explain ledger as “king of all books”?
Ans:	Because all the entries from the books of original entry must be posted to the different account in the ledger.
Q.14:	Define “Trial Balance”?
Ans:	A statement which is prepared by taking out the debit and credit balances of all accounts appearing in ledgers in order to check the arithmetical accuracy of the ledger is called Trial Balance.
Q.15:	What are different methods of preparing trial balance?
Ans:	i)       Total methodii)    Balance method
Q.16:	Which method of preparing trial balance is better and why?
Ans:	The balance method of preparing the trial balance is better due to the following reasons.i)       It shows small figures through balance.ii)    We can check balance easily.
Q.17:	Is trial balance represents whole accuracy of all accounts?
Ans:	No, it represents only arithmetical accuracy.
Q.18:	What is “balancing of account”?
Ans:	The process of equalizing the two sides of an account is called balancing.
Q.19:	Name different rules of balancing an account?
Ans:	i)       To add both sides of an account.ii)    To find the difference in a separate paper.iii)  To write the difference in separate paper. iv)   To add up both sides again. v)      Wind up.
Q.20:	Why we divide ledger into subsidiaries ledger?
Ans:	When the size of business organization is very large and number of transactions are very large and it becomes necessary to maintain a separate ledger for customer’s, supplier’s and other accounts.
Q.21:	Name any three rules of posting.
Ans:	1)     Recording the relevant account on the left hand side of the account which according to journal entry is to be debited.2)     Recording the proper account on the right hand side of the account which according to journal is to be credited.3)     Putting the “To” on the debit side before first transaction and the word “By” on the credit side before first transaction.
Q.22:	What is meant by opening balance?
Ans:	A balance of any account that is brought forward from the previous accounting period in present accounting period or you have at the beginning of accounting period.
Q.23:	Name a y three advantages of ledger?
Ans:	1)     It provides guarantee of successful application of double entry system.2)     It provides summarized record of every account separately.3)     It helps in preparation of final accounts.
Q.24:	Name any three differences between journal and ledger?
Ans:	Journal Ledger i)       Recording in journal is called journalizing. It is a book of second entry. ii)    Recording in journal is called journalizing. Recording in ledger is called posting. iii)  Unit of data in journal is called transaction. Unit of data in ledger is called account.
Q.25:	Write any two features of characteristics of ledger?
Ans:	Ledger has two identical sides:i)       Left hand side (debit side)ii)    Right hand side (credit side)
Q.26:	Write any two advantages of trial balance?
Ans:	i)       It provides proof of arithmetical accuracy of accounting entries.ii)    If facilitate the preparation of final accounts by providing data in summarized from.
Q.27:	Give sketch (format) of the ledger account or standard of the ledger account?  SOLUTION NEXT PAGE
Ans:	Account Name  Date Particulars J.F. Amount Date Particulars J.F. Amount
Q.28:	Give sketch (format) of the trial balance or standard form of the trial balance.
Ans:	Name of Business                                     Trial Balance                                As at ………………………….  S.No       Account Names A/C No. Debit Credit