Samacheer Kalvi Class 11 Accountancy Solutions Chapter 4 Ledger

I. Choose the Correct Answer.

 

Question 1. Main objective of preparing ledger account is to ........................
(a) Ascertain the financial position
(b) Ascertain the profit or loss
(c) Ascertain the profit or loss and the financial position
(d) Know the balance of each ledger account
Answer: (d) Know the balance of each ledger account
In simple words: The main goal of keeping a ledger account is to find out how much money is left in each account. This helps in understanding the exact financial status of each item.

🎯 Exam Tip: Remember that a ledger account primarily shows the net effect and balance for individual accounts, unlike trial balances or financial statements which give a broader overview.

 

Question 2. The process of transferring the debit and credit items from journal to ledger accounts is called ........................
(a) Casting
(b) Posting
(c) Journalising
(d) Balancing
Answer: (b) Posting
In simple words: Taking information from the journal and putting it into the right ledger accounts is called posting. It's like moving entries from a rough diary to a structured record book.

🎯 Exam Tip: Clearly understand the difference between 'journalising' (recording in the journal first) and 'posting' (transferring to the ledger) as these are fundamental accounting steps.

 

Question 3. J.F means
(a) Ledger page number
(b) Journal page number
(c) Voucher number
(d) Order number
Answer: (b) Journal page number
In simple words: J.F. stands for "Journal Folio," which is a special number that links an entry in the ledger back to its original record in the journal. This helps track where each transaction came from.

🎯 Exam Tip: Journal Folio (J.F.) and Ledger Folio (L.F.) are important cross-referencing tools in accounting to maintain an audit trail between the journal and ledger.

 

Question 4. The process of finding the net amount from the totals of debit and credit columns in a ledger is known as ........................
(a) Casting
(b) Posting
(c) Journalising
(d) Balancing
Answer: (d) Balancing
In simple words: When you add up all the debits and all the credits in an account and then find the difference to see the final total, that process is called balancing. It helps to settle the account.

🎯 Exam Tip: Balancing an account involves finding the difference between total debits and total credits, and then carrying forward that difference as a balance for the next period.

 

Question 5. If the total of the debit side of an account exceeds the total of its credit side, it means
(a) Credit balance
(b) Debit balance
(c) Nil balance
(d) Debit and credit balance
Answer: (b) Debit balance
In simple words: If the total amount on the debit side is more than the total on the credit side, it means the account has a "debit balance". This is common for asset and expense accounts.

🎯 Exam Tip: Assets and expenses typically show debit balances, while liabilities, capital, and income accounts generally show credit balances.

 

Question 6. The amount brought into the business by the proprietor should be credited to
(a) Cash account
(b) Drawings account
(c) Capital account
(d) Suspense account
Answer: (c) Capital account
In simple words: When the owner puts money into the business, that money is recorded in the Capital account. The Capital account shows how much the owner has invested.

🎯 Exam Tip: Remember that capital represents the owner's investment in the business, and it is a liability from the business's perspective, hence it usually has a credit balance.

II. Very Short Answer Type Questions

 

Question 1. What is a ledger?
Answer: A ledger account is a summary of all transactions related to a person, asset, liability, expense, or income over a specific time. It shows the overall effect of these transactions. The ledger is often called the "principal book of accounts" because it contains all types of accounts, such as personal, real, and nominal accounts. This book helps to figure out the balance for each account. All ledger accounts are set up based on the entries already made in the journal.
In simple words: A ledger is a main book that keeps a summary of all business deals for each type of account, like cash or sales. It shows the final balance for each account.

🎯 Exam Tip: Emphasize that the ledger provides a consolidated view of each account, making it easy to determine individual balances, which is crucial for preparing financial statements.

 

Question 2. What is meant by posting?
Answer: Posting is the process of moving debit and credit entries from the journal to the correct ledger accounts. This is the second step in the accounting cycle, after transactions have been recorded in the journal. Moving information from the journal to the ledger helps organize all transactions by account.
In simple words: Posting means taking the money records from the daily journal and putting them into the right accounts in the ledger book.

🎯 Exam Tip: Highlight that posting involves accurately transferring information to ensure that each account reflects its true position based on journal entries.

 

Question 3. What is debit balance?
Answer: A debit balance occurs when the total amount on the debit side of an account is more than the total amount on its credit side. This difference represents the balancing figure for that account. For example, asset accounts typically show a debit balance.
In simple words: A debit balance means that an account has more money entered on its left side (debit) than on its right side (credit).

🎯 Exam Tip: Understand that debit balances are normal for assets and expenses, indicating an increase in those accounts or a decrease in liabilities or equity.

 

Question 4. What is credit balance?
Answer: A credit balance happens when the total amount on the credit side of an account is greater than the total amount on its debit side. The difference between these totals is the credit balance. Accounts like liabilities, capital, and income typically have a credit balance. This shows that the account has more credit than debit activity.
In simple words: A credit balance means an account has more money on its right side (credit) than on its left side (debit).

🎯 Exam Tip: Remember that credit balances are normal for liabilities, capital, and revenue accounts, signifying an increase in these accounts or a decrease in assets or expenses.

 

Question 5. What is balancing of an account?
Answer: Balancing an account means adding up all the amounts on both the debit and credit sides separately. Then, the difference between these two totals is calculated. This difference is recorded as 'Balance c/d' (balance carried down) in the amount column on the side with the smaller total. This step makes both the debit and credit totals equal. The balancing figure is then brought down to the opposite side as 'Balance b/d' (balance brought down) for the start of the next accounting period. If the debit side total is greater, it's a debit balance; if the credit side total is greater, it's a credit balance. If both sides are equal, the account has a nil balance.
In simple words: Balancing an account is when you sum up both sides, find the difference, and put it on the smaller side to make them equal. This difference is then carried over as the new starting balance.

🎯 Exam Tip: Clearly show the 'Balance c/d' on the lighter side to equalize totals, and then 'Balance b/d' on the heavier side to start the next period, ensuring proper continuity.

III. Short Answer Questions

 

Question 1. Distinguish between journal and ledger.
Answer:

In simple words: The journal is where you first write down all transactions in order, like a diary. The ledger is where you sort these transactions by account to see their final balances, like a summary book.

🎯 Exam Tip: When distinguishing, always focus on the primary purpose and stage of each book: the journal is for initial chronological record, and the ledger is for classified summary and balancing.

 

Question 2. What is ledger? Explain its utilities.
Answer: A ledger account is a summary of all transactions related to a person, asset, liability, expense, or income over a specific period, showing their net effect. It's considered the main book of accounts, holding all personal, real, and nominal accounts. The ledger allows for determining account-wise balances and is prepared using journal entries.
Some key uses of a ledger are:
1. Quick Information about a Specific Account: It provides all details about an account (like sales, purchases, machinery) at a quick glance. For instance, if there are many transactions with a customer, the ledger can quickly show the total amount still owed.
2. Control Over Business Transactions: By analyzing the balances taken from the ledger, businesses can gain better control over their transactions. This helps in understanding financial trends.
3. Preparation of Trial Balance: The balances from ledger accounts are used to prepare a trial balance, which checks if the journal and ledger entries are arithmetically correct. This is an essential check for accuracy.
4. Helps Prepare Financial Statements: Financial statements, such as the profit and loss account and the balance sheet, are created from the ledger balances. This helps determine the net profit or loss and the overall financial health of the business.
In simple words: A ledger is a book that keeps all financial records summarized by account type. It helps you quickly see how much money is in each account, control your business money, check for math errors, and make important financial reports.

🎯 Exam Tip: When listing utilities, clearly explain how the ledger's consolidated data directly aids in decision-making, financial control, and the preparation of further financial reports.

 

Question 3. How is posting made from, the journal to the ledger?
Answer: Posting is the process of moving debit and credit items from the journal to the correct ledger accounts. Here's how to do it:
1. Find the ledger account that is debited in the journal entry. If this account is new, open it in the ledger and write its name at the top center. If it already exists, find it using the ledger index. Then, make the entries on the debit side of this account.
2. In the date column on the debit side of the ledger account, write the date of the transaction.
3. In the particulars column, write the name of the account that was credited in the journal entry, using the word 'To' before it.
4. In the 'amount' column, record the debit amount.
5. Now, find the ledger account that was credited in the original journal entry. If it's a new account, open it and write its name at the top center. If it's an existing account, find it in the index. All entries for this account should be made on its credit side.
6. In the date column on the credit side, write the date of the transaction.
7. In the particulars column, write the name of the account that was debited in the journal entry, using the word 'By' before it. The words 'To' and 'By' clearly indicate the opposite account involved in the transaction.
8. Finally, write the credit amount in the amount column.
In simple words: To post, you take each debit and credit from the journal and put them in the right ledger accounts. For a debit in the journal, you debit the ledger account, writing 'To' and the other account's name. For a credit in the journal, you credit the ledger account, writing 'By' and the other account's name.

🎯 Exam Tip: Ensure you accurately identify the debited and credited accounts from the journal entry and correctly use 'To' for debit entries and 'By' for credit entries in the ledger for clear cross-referencing.

 

Question 4. Explain the procedure for balancing a ledger account.
Answer: Balancing a ledger account involves several steps to determine the net balance and prepare it for the next accounting period:
1. Add up all the amounts in the debit column and all the amounts in the credit column separately.
2. Find the difference between these two totals.
3. Place this difference in the amount column on the side that has the smaller total. Write 'Balance c/d' (balance carried down) in the particulars column next to this difference. In the date column, write the last day of the accounting period. This makes both sides equal.
4. Now, both the debit and credit columns should have the same total. Record these equal totals on the same line horizontally. Draw lines above and below the total amount to make it stand out from other figures.
5. Bring down the calculated difference to the opposite side, below the total. This will be the opening balance for the new period, written as 'Balance b/d' (balance brought down) in the particulars column. In the date column, write the first day of the next accounting period. This ensures continuity.
6. If the total on the debit side was originally higher, the balancing figure is a debit balance. If the total on the credit side was higher, it's a credit balance. If both sides were equal, the account will show a 'nil' balance.
In simple words: To balance an account, first sum up both the debit and credit sides. Then, write the difference on the side with the smaller total to make them equal, calling it 'Balance c/d'. Finally, carry this amount to the opposite side below the total, marking it as 'Balance b/d' for the next period.

🎯 Exam Tip: Always ensure the 'Balance c/d' is written on the side with the smaller total, and 'Balance b/d' on the side with the larger total, but on the opposite side of the account, to correctly reflect the nature of the balance.

IV. Exercises

 

Question 1. Journalise the following transactions and post them to ledger.
2016 Jan.1 Started business with cash - 10,000
5 Paid into bank - 5,000
7 Purchased goods from Ram for cash - 1,000
Answer:
Journal of Mr. X

Ledger Account
Cash Account
Capital Account
Bank Account
Purchases Account

In simple words: First, record each transaction in the journal with debits and credits. Then, transfer these entries to the correct ledger accounts for Cash, Capital, Bank, and Purchases, ensuring each account shows its balance.

🎯 Exam Tip: When journalizing, ensure every transaction follows the double-entry system (equal debits and credits). For ledger posting, accurately transfer amounts and particulars to the correct side of each T-account.

 

Question 2. Give journal entries for the following transactions and post them to ledger.
2015, March 1 Goods sold to Somu on credit - 5,000
7 Furniture purchased for cash - 300
15 Interest received - 1,800
Answer:
Journal of Mr. Y

Ledger Account
Samu Account
Sales Account
Furniture Account
Cash Account
Interest Received Account

In simple words: Journalize each event, like selling goods on credit to Somu, buying furniture for cash, and receiving interest. Then, carefully transfer these entries to the correct ledger accounts for Somu, Sales, Furniture, Cash, and Interest Received, making sure to balance each.

🎯 Exam Tip: Pay close attention to the date and type of transaction (cash, credit) when journalizing, as this affects which accounts are debited or credited, and subsequently how they are posted in the ledger.

 

Question 3. Pass journal entries for the following transactions and post them to ledger.
2017 Aug 1 Dharma started business with cash - 70,000
6 Cash received from Ganesan - 10,000
10 Rent paid - 3000
20 Received commission from Anand - 5000
Answer:
Journal of Mr. Dharma

LEDGER ACCOUNT
Cash Account
Dharma Capital Account
Ganesan Account
Rent Account
Commission Received Account

In simple words: Journalize each event, such as the owner starting the business with cash, receiving cash from Ganesan, paying rent, and getting commission. Then, carefully transfer these entries to the correct ledger accounts for Cash, Dharma Capital, Ganesan, Rent, and Commission Received, making sure each account is balanced.

🎯 Exam Tip: Always analyze the dual effect of each transaction (what is received and what is given) to correctly identify the debit and credit accounts in the journal before posting to the ledger.

 

Question 4. Record the following transactions in the journal of Banu and post them to the ledger.
2018, Sep 1 Commenced business with cash - 90,000
5 Rent received - 4,000
12 Purchased 6 tables from Gobu & Co. for cash - 6,000
Answer:
Journal of Mr. Banu

In simple words: First, record all transactions like starting business with cash, receiving rent, and buying furniture for cash in Banu's journal. Make sure each entry has equal debits and credits. Then, these journal entries would be transferred to the ledger accounts.

🎯 Exam Tip: Always clearly identify the two accounts affected by each transaction (one debit, one credit) and their respective amounts when preparing journal entries. Remember that a purchase of an asset (like tables) for cash reduces cash and increases the asset.

Banu Account

 

Rent Received Account

 

Furniture Account

 

Question 5. The following balances appeared in the books of Vinoth on Jan 1, 2018. Assets: Cash Rs 40,000; Stock Rs 50,000; Amount due from Ram Rs 20,000 Machinery Rs 40,000 Liabilities: Amount due to Vijay Rs 10,000 Pass the opening journal entry and post them to Vinoth's Capital account,
Answer: To record the initial financial position of the business, an opening journal entry is passed. This entry records all assets on the debit side and all liabilities and capital on the credit side. The difference between total assets and total liabilities represents the owner's capital. After recording the journal entry, each item is then posted to its respective ledger account, which summarizes all transactions for that account.
In simple words: We first write down all the business's starting money and items (assets) and debts (liabilities). Then, we move these to separate accounts to track how much money Vinoth started his business with.

Ledger Account

Vinoth Capital

🎯 Exam Tip: Always make sure that the total debits equal total credits in your opening entry to maintain the accounting equation (Assets = Liabilities + Capital).

 

Question 6. Prepare Furniture A/c from the following transactions 2016, Jan 1 Furniture in hand - 2,000 1 Purchased furniture for cash - 4,000 30 Sold furniture - 400
Answer: A Furniture Account is a real account used to record all transactions related to furniture. When furniture is bought, the account is debited, and when it is sold, the account is credited. The balance in this account shows the value of furniture owned by the business at a specific time.
In simple words: This account tracks how much furniture the business owns. When new furniture is bought, we add it. When old furniture is sold, we take it out.

🎯 Exam Tip: Remember that selling an asset like furniture reduces its value, so the Sales Account is credited and the Furniture Account is credited in the ledger.

 

Question 7. The following balances appeared in the books of Kumaran on April 1, 2017. Assets: Cash Rs 1,00,000; Stock Rs 40,000; Amount due from Rohit Rs 10,000; Furniture Rs 10,000; Liabilities: Amount due to Anusha Rs 40,000; Kumaran's capital Rs 1,20,000 Find the capital and show the ledger posting for the above opening balances.
Answer: The capital of a business is calculated as Total Assets minus Total Liabilities. For Kumaran, this means adding up Cash, Stock, Rohit (debtor), and Furniture to get total assets. Then, subtract the liability to Anusha to find the capital. Each of these opening balances is then posted to its own ledger account to show the starting position.
In simple words: We list all the things Kumaran owns (assets) and all the money he owes (liabilities) to figure out how much money he started the business with (capital). Then, we create separate records for each of these items.

Opening Entry

Cash Account

Stock Account

Rohith Account

Furniture Account

Anush Account

Kumaran Account

🎯 Exam Tip: Always remember that Capital (owner's investment) is a liability for the business and typically has a credit balance, appearing on the credit side of the ledger.

 

Question 8. Give journal entries and post them to cash account. 2016, June 1 Commenced business with cash - 1,10,000 10 Introduced additional capital - 50,000 28 Withdrawn for personal use - 20,000
Answer: First, record each transaction chronologically in the journal, noting debits and credits. Starting a business with cash and introducing more capital increases cash and capital, while withdrawing cash for personal use decreases both cash and capital (recorded as drawings). After journalizing, transfer all cash-related entries to the Cash Account ledger to summarize the cash movements.
In simple words: Write down all the money coming in and going out of the business in order. Then, put all the cash movements into one big cash book to see the total cash left.

Journal Entry

LEDGER ACCOUNT

Cash Account

🎯 Exam Tip: Remember to always balance the Cash Account after all transactions are posted, ensuring the total debits match the total credits.

 

Question 9. Give journal entries from the following transactions of Mohit, dealing in Textiles and post them to ledger. 2014 Aug 1 Commenced business with cash - 1,10,000 7 Opened bank account with SBI - 50,000 3 Purchased furniture for cash - 20,000
Answer: First, all these transactions are recorded in the journal in chronological order, showing which accounts are debited and credited. Starting a business with cash increases cash and capital. Opening a bank account transfers cash from hand to bank. Purchasing furniture for cash increases furniture and decreases cash. These entries are then transferred to the respective ledger accounts (Cash A/c, Capital A/c, SBI A/c, Furniture A/c) to track each account's activity and balance.
In simple words: We write down every business deal in a diary (journal). Then, we move these records to specific books for Cash, Capital, Bank, and Furniture to see how each one changed.

Journal Entry

LEDGER ACCOUNT

Cash Account

Capital Account

🎯 Exam Tip: Remember that capital increases with investments and decreases with drawings. It always carries a credit balance.

 

SBI Account

Furniture Account

🎯 Exam Tip: Assets typically have debit balances. When an asset like furniture is purchased, its account is debited to increase its value.

 

Question 10. Give journal entries for the following transactions and post them to ledger. 2016, sep 1 Commenced business with cash - 80,000 7 Bought goods for cash from Roopan - 10,000 10 Purchased goods from Hema on credit - 42,000 22 Goods returned to Hema - 2,000 23 Cash paid to Hema - 10,000
Answer: Each business event must be recorded in the journal, stating which accounts are affected and whether they are debited or credited. For example, starting with cash debits cash and credits capital. When goods are bought, purchases are debited. When goods are returned, purchase returns are credited. After journalizing, each transaction is posted to its relevant ledger account to keep a summary of all financial activities.
In simple words: Write down all money-related events in order. Then, put them into special books like Cash, Capital, Purchases, and Hema's account to track everything properly.

Ledger Account

Cash Account

Capital Account

🎯 Exam Tip: When a business commences with cash, both the Cash Account (an asset) and the Capital Account (owner's equity) increase, with Cash debited and Capital credited.

 

Purchases Account

Hema Account

Purchases Return Account

🎯 Exam Tip: Purchases return reduces the amount of goods purchased, so it is credited to decrease the net purchases and Hema's account is debited.

 

Question 11. Give Journal entries for the following transactions and post them to Cash A/c and Sales A/c. 2017, Aug 10 Sold goods and cheque received but not deposited - 30,000 14 Sold goods on credit to Gopi - 12,000 20 Received cash from Gopi - 12,000
Answer: Each transaction must first be recorded in the journal, indicating the debited and credited accounts. Selling goods for cash or cheque increases Cash (or Bank) and credits Sales. Selling on credit creates a debtor (Gopi A/c) and credits Sales. Receiving cash from a debtor debits Cash and credits the debtor's account. These entries are then posted to the Cash and Sales ledger accounts to show their activity.
In simple words: Write down all the buying and selling events in the main book. Then, put all the cash money movements into the Cash book and all the selling details into the Sales book.

LEDGER ACCOUNT

Sales Account

Cash Account

🎯 Exam Tip: Always debit Cash when it increases (e.g., from cash sales or collections from debtors) and credit Sales when income is generated from selling goods.

 

Question 12. Journalise the transactions given below and post them to ledger. 2017 Oct. 18 Paid trade expenses - 1,000 25 Bought postage stamps - 100 30 Commission received - 6,000 30 Rent paid - 4,000
Answer: Each financial transaction is first recorded in the journal, specifying the debited and credited accounts according to accounting rules. For expenses like trade expenses, postage stamps, and rent paid, the respective expense accounts are debited, and Cash A/c is credited. For income like commission received, Cash A/c is debited, and Commission Received A/c is credited. These journal entries are then used to update the corresponding ledger accounts to maintain a summarized record of each type of transaction.
In simple words: First, write down every money-related event in a daily log. For money spent, put it in the expense box. For money received, put it in the income box. Then, take these notes and update the main books for each type of account.

Journal of Entries

LEDGER ACCOUNT

Trade Expenses Account

Cash Account

🎯 Exam Tip: When an expense is paid, debit the expense account and credit Cash. When income is received, debit Cash and credit the income account.

 

Stationery Account

Commission Received Account

Rent Account

🎯 Exam Tip: Remember that Rent Paid is an expense and, like all expenses, increases with a debit and decreases with a credit. It has a normal debit balance.

 

Question 13. Journalise the following transactions and prepare ledger accounts. 2015, Feb 1 Sold goods for cash - 5,000
Answer: For Question 13, all transactions would first be recorded chronologically in the journal, showing debit and credit for each event. Then, these entries would be posted to their respective ledger accounts, such as Cash Account, Sales Account, Purchases Account, Prabu Account, Kumar Account, and Salary Account, to maintain a detailed and summarized record of each. This helps track the flow of money and goods and the balances with debtors and creditors. The ledger accounts would then be balanced to find the closing balance for each period.
In simple words: Write down all money-related dealings in a daily record. Then, move each transaction to its own book, like for cash, sales, or purchases. This helps track who owes money and who is owed money.

🎯 Exam Tip: Always make sure that for every debit entry in the journal, there is a corresponding credit entry, and vice-versa, to uphold the double-entry accounting principle.

 

Question 13. Journalise the following transactions and prepare ledger accounts.
2015, Feb 1 Sold goods for cash – 5,000
2 Purchased goods from Kumar on credit – 4,000
5 Sold goods to Prabu on credit – 8,000
12 Received cash from Prabu – 1,200
20 Paid to Kumar – 2,000
25 Paid salary – 3,000
Answer:

Journal Entry

LEDGER ACCOUNT
Cash Account

Sales Account

Purchases Account

Prabhu Account

Kumar Account

Salary Account

In simple words: Journal entries record transactions chronologically, then these entries are moved to specific ledger accounts to group all transactions for each account. This helps in understanding the total impact on each account, like how much cash was involved in various activities.

🎯 Exam Tip: Remember that every journal entry has a double effect (debit and credit), and this must be consistently reflected when posting to the respective ledger accounts. Always ensure the total debits equal total credits.

 

Question 14. Enter the following transactions in the books of Ganesan and post them into ledger.
2017, Oct 1 Started business with cash – 25,000
5 Deposited into bank – 12,500
10 Purchased furniture and payment by cheque – 2,000
15 Goods purchased for cash – 5,000
19 Sold goods to Vasu on credit – 4,000
22 Goods worth Rs 500 taken for personal use
Answer:

Journal of Ganesan

Ledger Account
Cash Account

Capital Account

Bank Account

Furniture Account

Purchase Account

Vasu Account

Sales Account

Drawings Account

In simple words: This process shows how each business transaction is first recorded in the journal and then organized into individual ledger accounts. This helps to see the total money going in and out for each item, like cash, capital, or goods.

🎯 Exam Tip: When dealing with personal use of goods (drawings), always debit the Drawings A/c and credit the Purchases A/c, as it reduces the goods available for sale, not just profit.

 

Question 15. Journalise the following transactions in the books of Arun and post them to ledger accounts.
2017, Dec 1 Arun started his business with cash – 10,000
3 Bought goods for cash – 1,500
8 Sold goods to Krishna on credit – 4,000
14 Purchased goods from Govind on credit – 2,000
25 Received cash from Krishna – 3,000
28 Cash paid to Govind – 1,000
Answer:

Journal of Entries

Ledger Account
Cash Account

Arun Capital Account

Purchases Account

Krishna Account

Sales Account

Govind Account

In simple words: Journal entries are like a daily diary of business dealings, showing money coming in and going out. Ledger accounts then collect all these entries for specific items, like cash or purchases, so you can easily see the total amount for each.

🎯 Exam Tip: When transactions involve cash and credit, make sure to correctly identify which accounts are affected. Cash transactions impact the Cash A/c directly, while credit transactions create Debtors or Creditors accounts.

 

Question 16. Journalise the following transactions and post them to ledger in the books of Raja.
2018, Mar 1 Sold goods to Senthil for cash – 9,000
5 Sold goods to Murali on credit –,500
9 Cash sales – 6,000
18 Bought goods from Mani on credit – 3,200
23 Received Rs 4,000 from Murali in full settlement of his account
Answer:

Journal of Raja

LEDGER ACCOUNT
Cash Account

Sales Account

Murali Account

Purchases Account

Mani Account

Discount allowed Account

In simple words: This activity shows how transactions are recorded in a journal first, then moved to different ledger accounts for a clearer overview. The discount given by Raja to Murali for early payment is also recorded, showing how settlement terms affect accounts.

🎯 Exam Tip: When a payment is received in "full settlement," it often implies a discount has been allowed. This discount must be debited to a 'Discount Allowed A/c' and recorded in the journal entry.

 

Question 17. Journalise the following transactions and post them to the ledger.
2017, July 1 Cash in hand – 50,000
5 Goods purchased by cash – 30,000
7 Insurance paid – 2,500
10 Machinery purchased for cash – 9,000
15 Interest received – 2,000
18 Goods sold for cash – 7,000
Answer:

Journal of Entry of Mr. Y

LEDGER ACCOUNT
Cash Account

Purchases Account

Insurance Account

Machinery Account

Interest Received Account

Sales Account

In simple words: This activity details how starting cash, purchases (goods and machinery), expenses (insurance), and income (interest and sales) are recorded in the journal first. Then, these are posted into dedicated ledger accounts to show how each account balance changes over time.

🎯 Exam Tip: Remember to always debit what comes in or is an expense, and credit what goes out or is an income. Keep separate ledger accounts for each type of asset, liability, expense, and income.

 

Question 18. Journalise the following transactions in the books of Vasu and post them to ledger accounts.
2017, Nov 1 Cash in hand Rs 1,00,000; Cash at bank: Rs 30,000
2 Vasu sold goods to Jothi for Rs 25,000 against a cheque and deposited the same in the bank
4 Received as commission Rs 5,000
8 Bank paid Rs 15,000 directly for insurance premium of Vasu.
15 Cash deposited into bank Rs 30,000
20 Cash withdrawn from bank for personal use Rs 45,000.
Answer:

Journal of Mr. Vasu

Ledger Account
Cash Account

Bank Account

Sales Account

Commission Received Account

Insurance premium Account

Drawings Account

In simple words: This activity starts with initial cash and bank balances, then records various transactions such as selling goods by cheque, receiving commission, paying insurance from the bank, depositing cash into the bank, and withdrawing cash for personal use. Each transaction is first entered into the journal and then posted to the relevant ledger accounts like Cash, Bank, Sales, Commission, Insurance, and Drawings to track their balances.

🎯 Exam Tip: When cash or bank amounts are part of the initial balance, always remember to record them as "To Balance b/d" in their respective ledger accounts. Also, understand the difference between business expenses (like insurance) and personal withdrawals (drawings) as they affect different accounts.

 

Question 19. Prepare Anand's account from the following details.
2017, July 1 Credit balance of Anand's A/c - 4,000
15 Amount paid to Anand - 2,000
18 Goods purchased from Anand on credit - 8,000
20 Paid to Anand - 3,960
Discount allowed by him - 40
25 Goods purchased from Anand - 5,000
Answer:

Ledger Account

Dr. Anand's Account Cr.

🎯 Exam Tip: Remember that a ledger account summarizes all transactions for a specific account, showing the total effect over a period.

 

Question 20. Prepare a Sales account from the following transactions.
2018, Jan 1 Sold goods to Sam - 4,000
4 Sold goods to Suresh - 2,500
11 Sold goods to Joy - 8,000
17 Sold goods to Rajan - 3,000
Answer:

Ledger Account

Sales Account

🎯 Exam Tip: Always make sure that the total debits and credits in a ledger account match, indicating the account is balanced.

 

Question 21. Show the direct ledger postings for the following transactions:
2017, June 1 Raja commenced business with cash Rs 50,000,
6 Sold goods for cash Rs 8,000
8 Sold goods to Devi on credit Rs 9,000
15 Goods purchased for cash Rs 4,000
20 Goods purchased from Shanthi on credit Rs 5,000
Answer:

Ledger Account

Cash Account

Raja Capital Account

Sales Account

Devi Account

Purchases Account

Shanthi Account

🎯 Exam Tip: When transactions involve multiple accounts, each account needs its own ledger, ensuring all related debits and credits are correctly posted.

 

Question 22. Show the direct ledger postings for the following transactions:
2017, July 1 Shankar commenced business with cash Rs 1,00,000
5 Sold goods for cash Rs 10,000
9 Wages paid Rs 6,000
19 Salaries paid Rs 8,000
20 Advertisement expenses paid Rs 4,000
Answer:

Ledger Account

Cash Account

Shankar Capital Account

Sales Account

Wages Account

Advertisement Account

Salaries Account

🎯 Exam Tip: Each transaction impacts at least two accounts (debit and credit), and the ledger helps categorize these impacts for clear financial overview.

 

11th Accountancy Guide Ledger Additional Important Questions and Answers

I. Choose the Correct Answer.

 

Question 1. Ledger is a book of:
(a) original entry
(b) final entry
(c) all cash transactions
(d) contra entry
Answer: (b) final entry
In simple words: The ledger is where all transactions from the journal are sorted and posted into final accounts.

🎯 Exam Tip: Remember that the journal is for original entries, while the ledger is for final entries, providing a summary of each account.

 

Question 2. Personal and real accounts are:
(a) closed
(b) Balanced
(c) closed and transferred
(d) opening
Answer: (b) Balanced
In simple words: Personal and real accounts are typically balanced at the end of an accounting period to find their closing figures.

🎯 Exam Tip: Distinguish between nominal accounts, which are closed to the profit and loss account, and personal/real accounts, which are balanced and carried forward to the next period.

 

Question 3. The column of ledger which links the entry with journal is
(a) L.F column
(b) J.F column
(c) Date column
(d) Particulars column
Answer: (b) J.F column
In simple words: The J.F (Journal Folio) column in the ledger tells you which page in the journal the entry originally came from.

🎯 Exam Tip: Always use the J.F column for cross-referencing between the journal and ledger, ensuring traceability of transactions.

 

Question 4. Posting on the credit side of an account is written as
(a) To
(b) By
(c) Being
(d) Both (a) and (b)
Answer: (b) By
In simple words: When you record something on the credit side of a ledger account, you write "By" before the name of the corresponding account.

🎯 Exam Tip: Remember the basic rule: "To" is used for debit entries and "By" for credit entries in ledger accounts.

 

Question 5. Posting on the Debit side of an account is written as
(a) To
(b) By
(c) Being
(d) Both (a) and (b)
Answer: (a) To
In simple words: When you record something on the debit side of a ledger account, you write "To" before the name of the corresponding account.

🎯 Exam Tip: Consistently using "To" for debits and "By" for credits helps maintain clarity and correctness in ledger postings.

 

Question 6. Nominal account having credit balance represents
(a) income / gain
(b) expenses / losses
(c) assets
(d) liabilities
Answer: (a) income / gain
In simple words: For accounts that show income or gains (like rent received or commission received), a credit balance means the business has earned that money.

🎯 Exam Tip: Recall the rules of nominal accounts: all incomes and gains are credited, and all expenses and losses are debited. A credit balance typically indicates income.

 

Question 7. Nominal account having debit balance represents
(a) income / gain
(b) expenses / losses
(c) liability
(d) assets
Answer: (b) expenses / losses
In simple words: For accounts that show expenses or losses (like salaries paid or rent paid), a debit balance means the business has spent that money.

🎯 Exam Tip: Understand that a debit balance in a nominal account usually signifies an expense or a loss incurred by the business.

 

Question 8. Real accounts always show
(a) debit balances
(b) credit balances
(c) nill balance
(d) Both (a) and (b)
Answer: (a) debit balances
In simple words: Real accounts, like assets such as cash or machinery, usually have a debit balance, showing what the business owns.

🎯 Exam Tip: Real accounts, which represent assets and properties, typically have a debit balance, reflecting the value of what the business possesses.

 

Question 9. Account having credit balance is closed by writing
(a) To Balance b/d
(b) By Balance c/d
(c) To Balance c/d
(d) By Balance b/d
Answer: (c) To Balance c/d
In simple words: If an account has more money on its credit side, you close it by writing "To Balance c/d" on the debit side. This balances the account for the current period.

🎯 Exam Tip: To close a credit balance, the balancing figure "To Balance c/d" (carried down) is placed on the debit side, making both sides equal. This balance is then brought down as "By Balance b/d" on the credit side for the next period.

 

Question 10. When the total of debits and credits are equal, it represents
(a) debit balance
(b) credit balance
(c) nil balance
(d) opening balance
Answer: (c) nil balance
In simple words: If the total money going into an account is the same as the total money going out, then the account has zero balance.

🎯 Exam Tip: A nil balance means the account is perfectly squared off, with no remaining amount to be carried forward or balanced.

 

Question 11. The balances of personal and real accounts are shown in the
(a) profit and loss account
(b) balance sheet
(c) trading account
(d) both (a) and (b)
Answer: (b) balance sheet
In simple words: The final amounts in personal and real accounts are shown in the balance sheet, which lists a company's assets, liabilities, and owner's equity.

🎯 Exam Tip: Remember that nominal accounts (expenses, incomes) are transferred to the Trading and Profit & Loss Account, while personal and real accounts (assets, liabilities, capital) form part of the Balance Sheet.

 

Question 12. If the total of the credit side of an account exceeds the total of its debit side, it means
(a) Credit balance
(b) Debit balance
(c) Nil balance
(d) Debit and credit balance
Answer: (a) Credit balance
In simple words: If the total of all money received or owed by the business is more than the total of all money paid or owing, then the account has a credit balance.

🎯 Exam Tip: A credit balance typically indicates a liability, income, or capital, showing the amount the business owes or has received more than it has spent.

 

Question 13. The closing balance is the next year's
(a) debit balance
(b) credit balance
(c) nil balance
(d) opening balance
Answer: (d) opening balance
In simple words: The money left over in an account at the end of one year becomes the starting money for that same account at the beginning of the next year.

🎯 Exam Tip: Always remember to carry forward the closing balance of one accounting period as the opening balance of the next, maintaining continuity of accounts.

 

Question 14. The ledger account is prepared in ____ format.
(a) T
(b) D
(c) C
(d) U
Answer: (a) T
In simple words: A ledger account is often shown in a "T" shape, with debits on the left side and credits on the right side.

🎯 Exam Tip: The 'T' format is a fundamental visual representation for all ledger accounts, clearly separating the debit and credit sides.

 

Question 15. The process of recording business transactions in a chronological order is called
(a) Recording
(b) Posting
(c) Journalizing
(d) Classifying
Answer: (c) Journalizing
In simple words: Putting all the business deals into a book, one after the other as they happen, is called journalizing.

🎯 Exam Tip: Journalizing is the first step in the accounting cycle, capturing raw transactions in the order they occur before they are categorized in the ledger.

 

Question 16. Which one of the following is known as the king of all books of accounts?
(a) Recording
(b) Posting
(c) Journalizing
(d) Classifying
Answer: (c) Journalizing
In simple words: Journalizing is the most important part because it's where you first write down every single business deal.

🎯 Exam Tip: The journal is called the 'book of original entry' and is crucial because it provides the initial, detailed record of all transactions.

 

Question 17. A decrease in the provision for doubtful debts would result in
(a) Increase in liability
(b) Decrease in liability
(c) Decrease in the net profit
(d) Increase in the net profit
Answer: (d) Increase in the net profit
In simple words: If a business sets aside less money for debts that might not be collected, it means their profit looks bigger.

🎯 Exam Tip: Provisions are expenses against profits; thus, a decrease in a provision (like for doubtful debts) reduces expenses and consequently increases net profit.

 

Question 18. The discount which is calculated on the list price of the goods is called.
(a) Cash discount
(b) Rebate
(c) Trade discount
(d) Discount
Answer: (c) Trade discount
In simple words: This is a reduction in price given by a seller to a buyer when goods are sold. It's normally given on the printed price of the goods.

🎯 Exam Tip: Trade discount is typically deducted before invoicing and is not recorded in the books of account, unlike cash discount.

 

Question 19. Merchandise stolen by someone should be debited to
(a) Sales account
(b) Purchases account
(c) Loss by theft account
(d) None of the options
Answer: (c) Loss by theft account
In simple words: When goods are stolen, the business loses money, so this loss is recorded in a special "Loss by theft" account.

🎯 Exam Tip: Any abnormal loss of goods (e.g., by theft, fire, or accident) should be debited to a specific 'Loss by' account to accurately reflect the financial impact.

 

Question 20. The owner of the business takes Rs.100 cash and goods costing Rs.200 for his family. The proper journal entry for this transaction is called
(a) drawing - debit; Cash - Credit; Purchases - Credit
(b) Drawing - debit; Cash - Credit; merchandise - credit
(c) Drawing - debit; Cash - credit; Sales - credit
(d) cash - debit; Purchases - debit; drawings - credit
Answer: (a) drawing - debit; Cash - Credit; Purchases - Credit
In simple words: When the owner takes cash and goods for personal use, it's called 'Drawings' and reduces both cash and the stock of goods.

🎯 Exam Tip: Remember that Drawings account is debited because the owner's capital reduces, cash is credited as it leaves the business, and purchases account is credited as goods are no longer available for sale.

 

II. Very Short Answer Type Questions

 

Question 1. What is Nil balance?
Answer: A nil balance occurs when the total amounts on the debit side and the credit side of an account are perfectly equal. This indicates that the account has no outstanding amount remaining.
In simple words: A nil balance means an account has zero money left because the debits and credits are the same.

🎯 Exam Tip: A nil balance shows that an account is completely settled, with no value to carry forward to the next accounting period.

 

Question 2. What are the steps involved in posting the opening entry?
Answer:
Step 1: The amounts debited in the opening journal entry are recorded on the debit side of their respective ledger accounts. The phrase "To Balance b/d" is written in the particulars column with the corresponding amounts in the amount column, using the first day of the accounting period as the date. This brings forward the previous period's assets.
Step 2: The amounts credited in the opening journal entry are recorded on the credit side of their respective ledger accounts. The phrase "By Balance b/d" is written in the particulars column with the corresponding amounts in the amount column, using the first day of the accounting period as the date. This brings forward the previous period's liabilities and capital.
In simple words: First, you write down all the debit items from the old balance on the left side of the new accounts. Then, you write all the credit items from the old balance on the right side of the new accounts, both dated for the first day.

🎯 Exam Tip: Clearly marking "To Balance b/d" and "By Balance b/d" is crucial for indicating that these are opening balances brought forward from the previous period.

 

Question 3. Indicate the nature of normal balance in the following accounts.
Answer:
a. Cash - Debit balance
b. Creditors - Credit balance
c. Sales - Credit balance
d. Furniture - Debit balance
e. Commission received - Credit balance
f. Debtors - Debit balance
g. Purchases - Debit balance
h. Capital - Credit balance
i. Discount earned - Credit balance
j. Computer - Debit balance
In simple words: For each account type, we see if it normally carries money on the left (debit) or right (credit) side. For example, things you own like cash are usually debit, while money you owe like to creditors is usually credit.

🎯 Exam Tip: Understanding the normal balance of each account type (assets, liabilities, capital, expenses, revenues) is fundamental to correctly applying the double-entry system.

 

Question 4. Define ledger.
Answer: A ledger is a principal book of accounts in which all financial transactions of a business are summarized and classified. According to L.C. Cropper, "the book which contains a classified and permanent record of all the transactions of a business is called the Ledger." It serves as a permanent record, showing the final position of each account. Every transaction is ultimately posted here from the journal.
In simple words: A ledger is a main book where all money deals are sorted into different accounts. It shows the final amount for each account, like how much cash is left or how much money is owed.

🎯 Exam Tip: The ledger is critical as it provides a summarized view of all transactions for individual accounts, making it easier to prepare trial balances and financial statements.

 

Question 5. What is compound journal entry?
Answer: A compound journal entry is a single journal entry that includes more than one debit, or more than one credit, or both. This type of entry is used when multiple transactions occur simultaneously or are related in such a way that they can be recorded together efficiently. It simplifies the recording process by combining several accounts into one entry. For instance, paying multiple expenses with a single cash outflow.
In simple words: A compound journal entry is when you record several money deals at once in one entry, instead of making separate entries for each. It's like grouping many small related payments or receipts into one big record.

🎯 Exam Tip: Use compound entries to record related transactions efficiently, but ensure that the total debits still equal the total credits to maintain accounting accuracy.

 

III. Additional Sums

 

Question 1. Prepare cash account A/c from the following transactions.
2018 Jan. 1 Commenced business with cash Rs 62,000
2 Good purchased for cash Rs 12,000
10 Cash sales Rs 10,000
12 Wages paid Rs 4,000
25 Furniture purchased for cash Rs 6,000
Answer:

Ledger Account

Cash Account

🎯 Exam Tip: When preparing a cash account, ensure that all cash inflows are debited and all cash outflows are credited to maintain an accurate cash balance.

 

Question 2. Prepare a sales A/c from the following transaction.
2018 Feb. 1 Cash sales - 5,000
4 Sold goods to Suresh - 4,000
8 Sold goods to Mohan - 8,000
12 Sold goods for cash - 3,000
Answer:

Ledger Account

Sales Account

🎯 Exam Tip: All sales, whether cash or credit, should be recorded on the credit side of the sales account, with the corresponding debit entry in either cash or the debtor's account.

 

Question 3. Prepare Rangasamy A/c for the following transaction.
2017 Aug. 17 Goods purchased from Rangasamy Rs. 20,000
19 Goods returned to Rangasamy Rs. 5,000
31 Settles Rangasamy's account
Answer:

Ledger Account

Rangasamy Account

In simple words: This table shows how Rangasamy's account changed. We recorded when goods were returned and when his account was settled by cash payment, matching it against the original purchases.

🎯 Exam Tip: For settlement of accounts, remember to account for both goods returned and cash paid to correctly balance the ledger.

 

Question 4. Prepare Chitra account from the following transaction.
2018 March. 18 Sold goods to Chitra Rs. 1,26,000
24 Chitra returned goods Rs. 6,000
28 Chitra settled her account
Answer:

Chitra Account

In simple words: This shows Chitra's account. She bought goods, returned some, and then paid the rest in cash. The entries show how her total due amount was cleared.

🎯 Exam Tip: When an account is settled, the total debits must equal total credits. Ensure returns and payments are recorded accurately to show a zero balance.

 

Question 5. Journalise the following transaction and post them to ledger in the book of Mr. Raja.
2018, Jan. 1 Started business with cash Rs 3,00,000
2 Opening bank account by deposition Rs 2,00,000
5 Purchased goods for cash Rs 10,000
15 Cash sales Rs 5,000
22 Purchased goods from X and Co. for Rs 15,000 and the payment is made through net banking
25 Sold goods for Y and Co. for Rs 30,000 and the payment is received thought NEET
Answer:

Journal of Mr. Raja

Ledger Account

Cash Account

Raja Capital Account

Bank Account

Purchases Account

Sales Account

In simple words: These journal entries and ledger accounts show all of Mr. Raja's business dealings for January 2018. It covers starting his business, banking money, buying and selling goods, and making purchases through net banking. Each entry is then posted to its correct ledger account to keep track of balances.

🎯 Exam Tip: For journal entries, always remember to debit what comes in or is an expense, and credit what goes out or is an income. Ensure each transaction impacts at least two accounts.

 

Question 6. Post the following Journal into Ledger of Thiru. Gowri Shankar.
Answer:

Journal of Thiru. Gowri Shankar

Ledger Account

Cash Account

Siva Account

Sayeed Account

Purchases Account

David Account

Sales Account

In simple words: This shows the ledger accounts for Thiru. Gowri Shankar. Each transaction from the journal is moved to the correct ledger account, like Cash, Siva, Sayeed, Purchases, David, and Sales, to track their individual balances. This helps to see what money came in, went out, and what goods were bought and sold.

🎯 Exam Tip: When posting from the journal to the ledger, ensure that every debit in the journal becomes a debit in the respective ledger account and every credit becomes a credit. This dual effect is crucial for accuracy.

 

Question 7. Show the sivect ledger positions for the following transaction.
2018, May. 1 Commenced business with cash Rs 1,50,000
2 Sold goods for cash Rs 50,000
5 Purchases goods for cash Rs 25,000
25 Salaries paid Rs 15,000
30 Wages paid Rs 10,000
Answer:

Ledger Account

Cash Account

Sales Account

Purchases Account

Capital Account

Salaries Account

Wages Account

In simple words: These ledger accounts show how different parts of the business changed based on the given transactions. You can see how cash changed, how much was sold, how much was purchased, and how much was spent on salaries and wages. Each account is balanced at the end of the month.

🎯 Exam Tip: Always make sure that the total debits for a period in any ledger account match the total credits if the account is closed, or the difference should be carried forward as a balance to the next period.