CameraIcon
CameraIcon
SearchIcon
MyQuestionIcon


Question

State whether the following statements are ‘True or False”.

1) Ledger is known as the book of original entry.
2) Narration is not necessary in ledger.
3) All accounts are closed down at the end of the accounting year.
4) Recording of a transaction in Journal is called posting.
5) Balance of personal account is brought down for the next year.
6) All transactions are recorded directly in ledger.
7) Ledger Folio and index is necessary for ledger.
8) Ledger posting is not necessary for Journal Proper.
9) Ledger Folio is recorded in Journal.
10) Ledger posting is made before passing Journal entry.


Solution

(1) False
Explanation:
A ledger is known as the book of final entry or secondary entry whereas a Journal is known as the book of original entry because all the transactions of a business are first of all recorded in the Journal from the source document and from the Journal, these entries are posted to the Ledger Accounts. Hence, a ledger is known as the book of secondary entry or final entry, as they are posted from the Journal and the balances of these accounts are used to prepare the financial statements of the business.

(2) True
Explanation:
Narration is not required in ledger, whereas it is required in a Journal. It is the brief explanation that provides the details of Journal entry and helps understand the account debited or credited. Journal entries are posted to the ledger accounts. Thus, narration is not necessary in a ledger.

(3) False
Explanation:
It is not necessary that all the accounts be closed down at the end of an accounting year. Accounts can be closed whenever required. For example, Sales and Purchases Book are totaled on monthly basis and transferred to the Sales and Purchases Account.

(4) False
Explanation:
Posting means transferring the entries from the Journal to the Ledger Accounts. Recording of a transaction in the Journal is termed as Journalising. Thus, when entries are posted or transferred to the respective ledger accounts, this process is termed as posting.

(5) True
Explanation:
The balance of personal account is brought down for the next year. Every year, the balance of the previous accounting period is brought down for the next year. Debit balance will be shown in the debit column and credit balance will be shown in the credit column. Thus, the balance of personal account is brought down for the next year.

(6) False
Explanation:
All transactions are first of all recorded in the Journal in the form of Journal entries and then these entries are posted to the relevant ledger accounts.

(7) True
Explanation:
A ledger folio is the page number or folio number that is recorded in the L.F. column in the Journal. It indicates the page number of the ledger book on which the relevant account appears. An index is the list of all ledger accounts that is maintained in alphabetical order, indicating the page number of each ledger account. A ledger book contains various pages and an index helps in finding out any ledger account. Therefore, the ledger folio and index are necessary for a ledger.

(8) False
Explanation:
A Journal Proper is the residual book that records all the transactions that cannot be recorded in any other subsidiary book. For example, if machinery is purchased on credit, it can neither be recorded in the Cash Book nor the Purchases Book. The reason is that the Cash Book only records cash transactions and the Purchases Book records only credit purchase of goods and not the purchase of assets. Therefore, purchase of machinery on credit will be recorded in the Journal Proper. Once the entry is recorded in the Journal Proper, it will be posted in the respective ledgers accounts.

(9) True
Explanation:
Ledger Folio is the page number or folio number that is recorded in the L.F. column in the Journal. This column indicates the page number of the ledger book on which the relevant account appears. It is not filled at the time of journalising but at the time of posting the transactions.

(10) False
Explanation:
Ledger posting is made after recording the Journal entries in the book of original entry. Once the transactions are recorded in the Journal, these are transferred or posted to the relevant ledger accounts. Thus, ledger posting is done after passing the Journal entry.

Accountancy
B.Keeping & Account (2014)
Standard XI

Suggest Corrections
thumbs-up
 
0


similar_icon
Similar questions
View More


similar_icon
Same exercise questions
View More


similar_icon
People also searched for
View More



footer-image