This document contains 40 multiple choice questions testing accounting concepts related to ledgers, accounts, and journal entries. Key points covered include: - A ledger is the principal book of accounts that contains all ledger accounts. - Ledger accounts are prepared from journal entries and transactions to record increases and decreases in asset, liability, capital and income/expense accounts. - The process of transferring journal entries to ledger accounts is called "posting".

1. 1. A ledger is called a book of
(a) Primary entry
(b) Secondary entry
(c) Final entry
(d) None of the above
2. A ledger account is prepared from
(a) Events
(b) Transactions
(c) Journal
(d) None of the above
3. The column of ledger which links the entry with journal is
(a) L.F column
(b) J.F column
(c) Debit column
(d) Credit column
4. Putting on the credit side of an account is written as
(a) Being
(b) To
(c) By
(d) From
5. Nominal account having debit balance represents
(a) Income / Gain
(b) Expenses / Losses
(c) Cash
(d) Assets
6. Real accounts always show
(a) Debit balances
(b) Credit balances
(c) Trial balances
(d) Nil balances
7. Accounts having credit balance is closed by writing
(a) To balance c/d
(b) To balance b/d
(c) By balance c/d
(d) By balance b/d
8. When the total of debits and credits are equal, it represents
(a) Debit balance
(b) Credit balance
(c) Nil balance
(d) Current balance

2. 9. The balances of personal and real accounts are shown in the
(a) Profit and Loss account
(b) Balance sheet
(c) current account
(d) Trading account
10. Which of the following accounts have only credit balance?
(a) Reserve fund account
(b) Capital account
(c) Accounts payable
(d) All of the above
11)Transferring entries from journal to ledger account is commonly known as
A) Recording
B) Transferring
C) Posting
D) Entry making
12) An account records the ___________ in the balance of an item
A) Increase
B) Decrease
C) Increase or decrease
D) Appreciation
13) If credit side of a bank account is greater than the debit side, it indicates which of the
following?
A) Bank overdraft
B) Cash at bank
C) Bank balance
D) Current Asset

3. 14) If debit side of a bank account is greater than credit side it indicates which of the
following?
A) Cash at bank
B) Bank understatement
C) Bank overdraft
D) Balance overstatement
14 Ledger is also
called -
1. Principal Book
2. Subsidiary Book
3. Day Book
4. Proper Book
Correct Answer: 1
15) _________ will be credited if goods are given as charity
A) Cash
B) Charity
C) Purchases
D) Sales
16) Which of the following is known as the base for preparing trial balance?
A) Journal
B) Cash account
C) Ledger account
D) Balance sheet

4. 17) If debit balance is greater than creadit balance then the account blance will be:
A) Credit balance
B) Debit and credit balance
C) Cash balance
D) Debit balance
18) The normal balance of capital account is
A) Credit balance
B) Debit balance
C) Cash balance
D) Neither debit nor credit balance
19) The normal balance of asset account is
A) Credit balance
B) Debit balance
C) Cash balance
D) Neither debit nor credit balance
20) The normal balance of liability account is
A) Debit balance
B) Credit balance
C) Cash balance
D) Neither debit nor credit balance

5. 11) Which of the following statements is incorrect regarding capital account?
A) Debit increases the capital account balance
B) Credit increases the capital account balance
C) Fresh capital increases the capital account balance
D) Net income increases the capital account balance
12) Which of the following is the normal balance of a rent expense account?
A) Credit balance
B) Cash balance
C) Overdraft
D) Debit balance
13) Revenue and expense accounts are referred as
A) Nominal accounts
B) Real account
C) Cash accounts
D) Banks account
14) The real accounts are accounts of Assets, liabilities and ________
A) Expenses
B) Revenues
C) Capital
D) Drawing

6. 15) Building account is classified as _________ account
A) Nominal
B) Real
C) Cash
D) Capital
16) Office equipments account is classifed as _________ account
A) Nominal
B) Real
C) Cash
D) Capital
17) ___________ helps business to classify transactions according to their nature
A) General journal
B) Real accounts
C) Ledger accounts
D) Cash accounts
18) Which of the following is a real account?
A) Office equipment
B) Rent expenses
C) Rent income
D) Insurance expense

7. 19) Which of the following accounts are closed at the end of an accounting period?
A) Nominal accounts
B) Balance sheet accounts
C) Real accounts
D) None of them
20) Which of the following is the closing balance of a ledger account?
A) Blance c/d
B) Balance b/d
C) Balance e/d
D) Balance f/c -
Q21. Transferring entries from journal to ledger account is commonly known as
(a) Recording
(b) Transferring
(c) Posting
(d) Entry making
Q22. Which of the following is known as the base for preparing trial balance?
(a) Journal
(b) Cash account
(c) Ledger account
(d) Balance sheet

8. Q 23 If debit balance is greater than credit balance then the account balance will be:
(a) Credit balance
(b) Debit and credit balance
(c) Cash balance
(d) Debit balance –
Q24 Which of the following describes a classification of the transaction?
(a) General ledger
(b) Income Statement
(c) Balance Sheet
(d) Journal
Q25. Which of the following describes a classification of the transaction?
(a) General ledger (b) Income Statement
(c) Balance Sheet (d) Journal
Q26. Transferring entries from journal to ledger account is commonly known as
(a) Recording (b) Transferring
(c) Posting (d) Entry making
Q27 . Which of the following is known as the base for preparing trial balance?
(a) Journal (b) Cash account
(c) Ledger account (d) Balance sheet
Q28 If debit balance is greater than credit balance then the account balance will be:
(a) Credit balance (b) Debit and credit balance
(c) Cash balance (d) Debit balance –
Q29. _________ is a book which contains all accounts of the business enterprise.
(a) Journal (b) Ledger
(c) Trial balance (d) None of the above

9. Q30 Ledger may be kept in the form of
(a) Bound Ledger (b) Loose Leaf Ledger
(c) Both a and b (d) None of the above
Q31. Transferring the debit and credit items from the journal to their respective
accounts in the ledger.
(a) Posting (b) Recording
(c) Journalising (d) Summarising
Q32 Ledger is a book of _______ entries
(a) Prime (b) Original
(c) Secondary (d) Generic
Q33 A normal balance of capital account is
(a) Credit Balance (b) Debit Balance
(c) Cash Balance (d) Neither Debit or Credit Balance
Q34. A normal balance of asset account is
(a) Credit Balance (b) Debit Balance
(c) Cash Balance (d) Neither Debit or Credit Balance
Q35. A ledger account is prepared from
(a) Event (b) Transactions
(c) Journal (d) None of the above
Q36. In a hand written accounting system, where would you record decrease in an
Asset.
(a) Nowhere in ledger account (b) On both sides of ledger account
(c) On Debit side of ledger account (d) On Credit side of ledger account

10. Q37. A supermarket purchases food items for resale on credit from a supplier,
Goldman Ltd. The entries in the supermarket's accounts should be:.
(a) Debit : Goldman Ltd. Credit : Sales
(b) Debit : Purchase Credit : Cash
(c) Debit : Purchase Credit : Goldman Ltd.
(d) Debit : Goldman Ltd. Credit : Purchases
Q38 A company buys a motor van on credit from Park Motors Ltd. The entries in
the company’s accounts should be:
(a) Debit : Park Motors Ltd. Credit : Motor Van
(b) Debit : Motor Van Ltd. Credit : Park Motors Ltd.
(c) Debit : Purchase Credit : Bank
(d) Debit : Cash Credit : Goldman Ltd.
Q39 A company pays a supplier JOJO LTD. the amount owed in cash. The entries in
the company's accounts should be:
(a) Debit : Cash. Credit : Purchases
(b) Debit : JOJO Ltd. Credit : Cash
(c) Debit : Purchase Credit : Cash
(d) Debit : Cash Credit : JOJO Ltd.
Q.40 Ledger is also called -
1. Principal Book
2. Subsidiary Book
3. Day Book
4. Proper Book
Correct Answer: 1