Question by C.A.(Dr.) G.S.Grewal – Series 29

  1. Balancing of Ledger is necessary.
  1. Every account has ______________ sides.
  1. Ledger Account is prepared from

(a)     Events

(b)     Transactions

(c)     Journal

(d)     Capital

Answer – Series 29

  1. True

Reason: After posting the transactions, accounts are balanced every year or after a certain period. Balancing an account means that the two sides of an account are totalled and the difference in total of the two sides is written on the side whose total is similar.

  1. two
  2. (c)

Reason: Transactions are fired recorded in the Journal, After recording the transactions, they are posted to the relevant account in the Ledger. All the accounts put together make a Ledger. In other words, Ledger is a book in which various accounts (Personal, Real and Nominal Accounts) are opened and transactions posted from the Journal Book.

Question – Series 57

       1.A Ledger is the principal book of account.

      2. Balance of Personal Account is carried ________________.

  1. Business transactions are recorded

(a)     In chronological order.

(b)     Weekly

(c)     At the end of the month

(d)     Any of the above

Answer – Series 57

  1. True

Reason: A Ledger may be defined as a “book which contains, in a summarised and classified form, a permanent record of all transactions”. It is the most important book of account, since the Trial Balance is drawn from it and from the Trial Balance, financial statements are prepared. Hence, Ledger is called Principal Book of account.

  1. forward
  2. (a)

Reason: Business transactions are recorded in chronological order that is as and why occur it is recorded in the books of accounts.

Question – Series 63

      1.A Trial Balance is a statement not an account.

      2. A Trial Balance is not a part of the double entry system of __________________.

  1. Which one of the following accounts normally has a debit balance?

(a)     Loan

(b)     Bank Overdraft

(c)     Sales

(d)     Purchases

Answer – Series 63

  1. True

Reason: A Trial Balance is a statement, prepared with the debit  and credit balances of the Ledger accounts to test the arithmetical accuracy of the books.

  1. Book Keeping
  2. (d)

Reason: Purchases has a debit balance. Increase in purchase is always debited and decrease in purchase is always credited.

Question – Series 64

  1. Bank Reconciliation Statement is a part of Cash Book.
  2. When Pass Book shows a debit balance, it means __________________.
  3. Bank Reconciliation Statement is prepared by

(a)     Creditors

(b)     Debtors

(c)     Bank

(d)     Account Holder

Answer – Series 64

  1. False

Reason: Bank Reconciliation Statement is not the part of Cash Book.

  1. overdraft as per Pass Book
  2. (d)

Reason: Bank Reconciliation Statement is prepared by Account Holder as it brings to light errors that may have been committed in the Cash Book or in the Bank Pass Book.

Question – Series 65

      1. Bank Reconciliation Statement brings out the reasons for difference in the Pass Book and Cash Book balances.

  1. A Bank Reconciliation Statement is prepared to ___________________.
  2. Bank Reconciliation Statement is

(a) a part of Double Entry System

(b) not a part of Double Entry System

(c) a part of Single Entry System

(d) not a part of Single Entry System

Answer – Series 65

  1. True

Reason: Bank Reconciliation Statement is prepared by Account Holder as it brings to light errors that may have been committed in the Cash Book or in the Bank Pass Book.

  1. reconcile bank balance
  2. (d)

Reason: Bank Reconciliation Statement is not a part of Double Entry System of Book Keeping. It is a method or technique to reconcile bank balance in Cash Book with the balance as per Bank Statement or Bank Pass Book to ensure that errors, if any, are corrected and transactions, if omitted are recorded.

Question – Series 67

  1. Trial Balance is a part of the Ledger.
  2. Trial Balance is a _____________ of debit and credit balances in Ledger at a Particular date.
  3. Which one of the following accounts normally has a credit balance?

(a)     Building

(b)     Capital

(c)     Cash

(d)     Premises

Answer – Series 67

  1. False

Reason: Trial Balance is not the part of Ledger but is an outcome of the books of accounts. Trial Balance is prepared from the balances in the Ledger.

  1. statement
  2. (b)

Reason: Capital Account has a credit balance, it being a liability of the firm. All other accounts are Assets Accounts, thus have debit balance.

Question – Series 68

  1. One of the purposes of preparing Trial Balance is to check the arithmetical accuracy of Double Entry System.
  2. Salaries Accounts are shown in _______________ column of Trial Balance.
  3. Which one of the following accounts normally has a debit balance?

(a)     Loan

(b)     Bank Overdraft

(c)     Sales

(d)     Purchases

Answer – Series 68

  1. True

Reason: Under the Double Entry System of accounting every transaction has two aspects, Debit and Credit of equal amount. Therefore, trial balance should match if the transaction recorded in journal books are correctly posted. It is one of the purposes of preparing trial balance.

  1. debit
  2. (d)

Reason: Purchases Account has a debit balance, it being an Expense Account under the Modern Approach. All other accounts have credit balances being either Liabilities or Revenue Accounts.

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