About Ledger

Following are some of the multiple choice questions on the Ledger with answers that will help the students in developing their knowledge.

Ledger MCQ

1. Ledger is a principal book that contains.

  • Real accounts only
  • Personal accounts only
  • All accounts
  • Nominal accounts only

2. A general ledger account that summarises all revenue and expenses for a reporting period is the ....

  • Capital account
  • Bank account
  • Profit and Loss Summary
  • Profit Account

3. Dequan's Car Detailing had cash sales of $840 yesterday. So far he has had $39,600 in Sales and has $2,788 in his Cash account. After posting what wiil be the new GL balances?

  • Credit Sales $40,440; Debit Cash $3,628
  • Debit Sales $40,440; Credit Cash $3,628
  • Credit Sales $35,760; Debit Cash $1,948
  • Debit Sales $35,760; Credit Cash $1,948

4. Bill Stone, owner, makes a $2,000 draw when there was $14,330 in the Cash account. There wa $34,500 in the Capital account. He would post thus to the General Ledger as

  • $2,000 Credit Bill Stone, Draw; $2,000 Debit Cash
  • $2,000 Debit Bill Stone, Draw; $2,000 Credit Cash
  • $2,000 Credit Bill Stone, Capital; $2,000 Debit Bill Stone. Draw
  • $2,000 Debit Bill Sone, Capital; $2,000 Credit Bill Stone Draw

5. The General Ledger (p. 94)

  • pages must all have an account balance >0
  • can have more than one account on a page if space permits
  • should be updated at least once a month
  • should have a page fof each account listed in the chart of accounts

6. If a debit is posted to an asset account, the amount of the debit (p. 98)

  • will be subtracted from the previous balance to determine the new debit account balance
  • will be added to the previous balance to determine the new debit account balance
  • will be subtracted from the previous balance to determine the new credit account balance
  • will be added from the previous balance to determine the new credit account balance

7. If a credit is posted to a liability account, the amount of the credit (p. 99)

  • will be added to the previous account balance to determine the new credit balance
  • will be subtracted from the previous account balance to determine the new credit balance
  • will be added to the previous account balance to determine the new debit balance
  • will be subtracted from the previous account balance to determine the new debit balance

8. A ledger is a (p. 94)

  • group of accounts
  • form to enter transactions in chronological order
  • business paper from which information is obtained for an entry
  • a document used to record sales

9. A schedule that contains all accounts needed to prepare financial statements (p. 94)

  • General Journal
  • General Ledger
  • All Sales Invoices
  • Source Documents

10. Debtor returned damage goods $77 + $7 GST write back = $77. Cost of good sold is $35. Choose the INCORRECT ledger for this transaction.

11. Sold good on credit $700 + $70 GST = $770. Cost of good sold is $350. Choose the correct ledgers for this transaction.

12. Returned damaged inventory to creditor $60 + $6 GST write back = $66. Choose the correct ledgers for this transaction.

13. Purchased inventory on credit $2,900 + $290 GST = $3,190. Choose the correct ledgers for this transaction.

14. Sales Returns ledger is closed to:

  • debit side of profit and loss ledger
  • credit side of profit and loss ledger

15. Drawings is classified as...

  • Expense
  • Negative Equity
  • Asset
  • Liability

16. The ledger that is a summary of all income and expenses is the:

  • Capital
  • Equity
  • Profit and Loss
  • Income statement
  • Balance sheet

17. Which three accounts are balanced (bal c/d and b/d) at the end of the reporting period?

  • Liabilities
  • Assets
  • Equity
  • All of above

18. Which side of the ledger would increase capital?

  • Debit
  • Credit

19. Which side of ledger would increase drawings?

  • Debit
  • Credit

20. Which side of the ledger would increase an expense?

  • Debit
  • Credit

21. Business paid for electricity $660 inclusive GST. Calculate GST.

  • 60
  • $60

22. Among these, which item is used as the base for preparing trial balance?

  • Cash account
  • Balance sheet
  • Journal
  • Ledger account

23. The ledger column that links the entry with the journal is called as.

  • J.F column
  • L.F column
  • Credit column
  • Debit column

24. The process of transferring of items from a journal to their respective ledger accounts is called as.

  • Entry
  • Arithmetic
  • Balancing
  • Posting

25. From which of the following is a ledger account prepared.

  • Transactions
  • Journal
  • Events
  • None of the above

26. A ledger is called a book of.

  • Primary entry
  • Final entry
  • Original entry
  • None of the above

27. Which of the following items would not appear on the credit side of the Inventory Account

  • Cost of Sales
  • Accounts Payable
  • Bank
  • Advertising

28. Which of the following items is an incorrect title in the Accounts Receivable Ledger

  • Bank/Discount Expense
  • Sales Returns/GST Clearing
  • Cost of Sales
  • Sales/GST Clearing

29. Which of the following titles is incorrect in the Accounts Payable Ledger

  • Inventory/GST Clearing
  • Bank/Discount Revenue
  • Purchase Returns/GST Clearing
  • Bank

30. Which of the following titles would not appear in the Accounts Receivable Account

  • Sales Returns/GST Clearing
  • Bad Debts
  • Sales/GST Clearing
  • Bank

31. Which of the following titles would not appear in the Inventory Account

  • Drawings
  • Cost of Sales
  • Advertising
  • Accounts Receivable

32. Which of the following items would appear on the Debit side of the GST Clearing Account if an amount was owed to the ATO

  • Accounts Payable/Bank/Bank/Accounts Receivable
  • Accounts Payable/Bank/Accounts Receivable/Accounts Payable
  • Accounts Receivable/Accounts Payable/Bank/Bank/Accounts Receivable
  • Accounts Payable/Bank/Bank/Balance

33. Select the correct set of titles to be recorded in the credit side of the Inventory Account

  • Bank/Accounts Payable/Cost of Sales/Inventory Gain
  • Bank/Accounts Payable/Cost of Sales/Inventory Loss/Inventory Write Down
  • Bank/Accounts Payable/Cost of Sales/Inventory Loss/Inventory Write Down/Advertising/Drawings
  • Accounts Payable/Cost of Sales/Inventory Loss/Inventory Write Down/Advertising/Drawings

34. Which of the following items would NOT appear in the P/L Summary account

  • Capital
  • Net Profit
  • Revenues
  • Expenses

35. Which of the following would be the correct entries for the credit side of the inventory account

  • Bank/Accounts Payable/Cost of Sales/Advertising/Drawings/Inventory Loss/Inventory Write Down
  • Bank/Accounts Receivable/Cost of Sales/Advertising/Drawings/Inventory Loss/Inventory Write Down
  • Accounts Payable/Cost of Sales/Advertising/Drawings/Inventory Loss/Inventory Write Down
  • Accounts Payable/Cost of Sales/Accounts Receivable/Advertising/Drawings/Inventory Loss/Inventory Write Down

36. Which of the following are incorrect titles in the Disposal of Van account

  • Accumulated Depreciation
  • Trade-in
  • Loss on Disposal
  • All of the above

37. A bad debt has been written off during the period as the Accounts Receivable has been declared bankrupt. The correct entry in the Allowance for Doubtful Debts ledger would be

  • Credit: Bad Debts
  • Debit: Accounts Receivable/GST Clearing
  • Debit: Bad Debts
  • Debit: Accounts Receivable

38. What credit entry is required when the business writes off a bad debt

  • Bad Debts
  • Accounts Receivable
  • Doubtful Debts
  • Allowance for Doubtful Debts

39. When creating an allowance for doubtful debts what is the debit entry in the General Journal

  • Bad Debts
  • Accounts Receivable
  • Allowance for Doubtful Debts
  • Doubtful Debts

40. What is the debit entry required to recognize Unearned Sales Revenue as being earned

  • Bank
  • Unearned Revenue
  • Unearned Sales Revenue
  • Sales

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