Today we’ll learn about “25 Short Questions and Answers-Ledger.” The importance of Ledger in accounting is immense.
Ledger is called the permanent book of all accounts. The financial statement is prepared on the basis of the ledger balance.
If you read this article from the beginning to the end, you will get the basic idea of the ledger that will definitely help you to do well in any competitive exams.
For theory read these articles:
So let’s get started.
Short Questions and Answers- Ledger
Question-01: What is Ledger?
Answer: The book in which a trader’s transactions are recorded in a classified permanent form is called the ledger.
Question-02: What is the feature of the ledger?
Answer: The main feature of Ledger is as follows:
- Each account is given a heading.
- “T” table and Moving Balance table are followed to prepare ledger.
- Record the date, the amount of money, and the journal folio no.
- The balance of each of the accounts is identified individually.
- Verify the arithmetic accuracy of accounting activities.
Question-03: What is the importance or necessity of Ledger?
Answer: The importance of ledger is as follows:
- Permanent records of transactions
- Summarizing and classifying the transactions
- Providing the arithmetical accuracy
- Provide information about financial conditions.
- Preventing misappropriation and fraud.
Question-04: Why ledger is called the king of all the books?
Answer: Ledger is called the king of all the books because it
- Keeps records permanently.
- Classify the accounts
- Provides the financial picture of the organization
- Helps to prepare final accounts of the organization.
- Justify arithmetical accuracy.
Question-05: From which word does the word “Ledger” come?
Answer: The word “Ledger” comes from the word “Ledge”
Question-06: What does the word “ledge” mean?
Answer: The word “ledge” means Shelf.
Question-07: What is the permanent book of accounts?
Answer: The permanent book of accounts is Ledger.
Question-08: What is the basement of the ledger?
Answer: the basement of the ledger is Journal.
Question-09: Why is Ledger called “Shelf”?
Answer: The ledge is called a shelf due to the arrangement of the transactions.
Question-10: How many types of personal ledgers and what are they?
Answer: There are 2 types of personal ledger which are as follows:
- Debtors Ledger and
- Creditors Ledger.
Question-11: How many types of impersonal ledgers and what are they?
Answer: There are 2 types of impersonal ledgers which are as follows:
- Assets & Liabilities related Ledger and
- Nominal Ledger.
Question-12: Which is the most commonly used “Ledger format” in modern times?
Answer: The most commonly used “Ledger format” in modern times is “Moving Balance Format”.
Question-13: How many money columns are there in Ledger’s Moving Balance format?
Answer: There are Four (4) columns in Ledger’s Moving Balance format.
Question-14: What is Balance?
Answer: The difference between the posted amount on the debit and credit side of the accounts is known as balance.
Question-15: What is the balancing of accounts?
Answer: The act of equalizing the two sides of the account is called the balancing of accounts.
Question-16: What is the meaning of C/D, B/D, C/F, B/F, B/O, and C/O?
Answer: The meaning of C/D, B/D, C/F, B/F, B/O, and C/O are as follows:
- C/D-Carried Down
- B/D-Brought Down
- C/F-Carried Forward
- B/F-Brought Forward
- B/O- Brought Over
- C/O- Carried Over
Question-17: Which one is prepared on the basis of ledger accounts balance?
Answer: Trial balance is prepared on the basis of ledger accounts balance.
Question-18: Which balance indicates all types of assets and expenses?
Answer: All types of assets and expenses express “debit balance”.
Question-19: Which balance indicates all types of liabilities and incomes?
Answer: All types of liabilities and incomes express “credit balance.”
Question-20: What is to be written at the time of writing the closing balance of the ledger?
Answer: Balance C/D or C/F.
Question-21: What is to be written at the time of writing the opening balance of the ledger?
Answer: Balance B/D or B/F
Question-22: On the basis of what information is the right decision taken to run a business?
Answer: Based on the information obtained from the ledger.
Question-23: What is the main advantage of the “Moving balance table”?
Answer: The balance of each account is always available.
Question-24: How many columns have a “traditional ledger table”?
Answer: Eight (8) columns.
Question-25: What is the main purpose of preparing a ledger account?
Answer: The main purpose of preparing a ledger account is to determine the balance of the account.
I hope you have a basic idea about the ledger at the end of the article. If you practice these “25 Short Questions and Answer-Ledger” on a regular basis, it will certainly help you improve your accounting skills.
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