Andhra Pradesh BIEAP AP Inter 1st Year Accountancy Study Material 5th Lesson Ledger Textbook Questions and Answers.
AP Inter 1st Year Accountancy Study Material 5th Lesson Ledger
Short Answer Questions
Define ledger and explain the advantages of ledger.
Ledger is a book which facilitates recording of all types of transactions related to Personal, Real and Nominal. All the debit and credit aspects which are recorded in the journal are transferred to the respective accounts in the ledger.
According to L.C.Cropper, “the book which contains a classified and permanent record of all transactions of a business is called the Ledger”.
The following are the advantages of ledger.
- Complete information at a glance : All the transactions pertaining to an account are collected at one place in the ledger. By looking at the balance of that account, one can understand the collective effect of all such transactions at a glance.
- Arithmetical accuracy: With the help of ledger balances, Trial balance is prepared to know the arithmetical accuracy of accounts.
- Result of business operations: It facilitates the preparation of final accounts for ascertaining the operating result and the financial position of the business concern.
- Accounting information : The data supplied by various ledger accounts are summarized, analyzed and interpreted for obtaining various accounting information.
What do you mean by posting ? Explain the rules relating to posting.
The process of transferring the entries recorded in the journal or subsidiary books to the respective accounts opened in the ledger is called ‘Posting’. In other words’, posting means process of grouping of all the transactions relating to a particular account at one place.
Following steps should be taken into account while making posting.
A) Opening of separate accounts: Each transaction affects minimum two accounts for which separate accounts are to be opened in the ledger. All transactions relating to an account, debit as well as credit, are to be posted to know the net position of the account.
B) Posting journal entry to concerned side: If an account is debited in the journal, posting will be made on the debit side of the account in the ledger. Similarly, if an account is credited in the journal, that account would be credited in the ledger.
C) Use of word ‘To” and “By” : While writing the debit side, commence with word “To” and write the name of the account, which is credited in the journal. Write the word “By” on the credit side before writing the name of the account that is debited in the journal.
D) Balance in account: The difference between debit and credit totals of an account is the net position of the account, known as balance of the account.
Very Short Answer Questions
What is ledger ? (Mar. ’15 – T.S.)
Ledger is a book which facilitates recording of all types of transactions related to Personal, Real and Nominal accounts separately in related accounts. In other words, the group of accounts recorded in a book is called Ledger’. Ledger is also called ‘Book of Final Entry’.
What is posting ? (Mar. ’17 – T.S.)
The process of transferring the entries recorded in the journal or subsidiary books to the respective accounts opened in the ledger is called Posting’. It is also process of grouping of all the transactions relating to a particular account at one place.
What do you mean by balancing of an account ?
Balancing means the writing of the difference between the amount columns of the two sides in the ledger (smaller total) side, so that the totals of the two sides become equal.
What is debit balance ?
The excess of debit total over the credit total is called the debit balance.
What is credit balance ?
The excess of credit total over the debit total is called the credit balance.
Journalise the following transactions of Mr. Prahlad and post them in the ledger and balance the same.
February 01 Prahlad invested Rs. 5,00,000 cash in the business
February 03 Paid into Bank Rs. 60,000
February 05 Purchased building for Rs. 2,00,000
February 07 Purchased goods for Rs. 50,000
February 10 Sold goods for Rs. 80,000
February 15 Withdrew cash from bank Rs. 12,000
February 25 Paid internet Rs. 2,000
February 28 Paid Salary Rs. 18,000
Journal Entries in the books of Mr. Prahlad
Ledger Accounts :
Prepare Pavan account from the following: (May ’17 – T.S.)
Prepare Sudha account from the following: (Mar. 2019 – T.S.) (May 17 – A.P.)
Prepare Swami’s account from the following: (Mar. 2018 – T.S.)
Prepare Machinery account from the following:
Prepare the Ledger account of Bhavya from the following particulars:
Journal Entries in the books of Bhavya
From the following information prepare Praveen’s Account as on 31-3-2014. (Mar. 2018 – A.P.)
Prepare Vamsi’s Account from the following.
Prepare Anurudh ‘s Account from the following. (Mar. 2019 – A.P.)
Visit any bank or any organisation and find the process of preparation of accounts.