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 Multiple-choice questions (MCQs) from the Ledger chapter of Accountancy, along with the correct answers 

SBSIRCommerce PRESENT 

1. What is a ledger?

   - [ ] A journal entry book

   - [x] A principal book of accounts

   - [ ] A trial balance sheet

   - [ ] A profit and loss statement

2.What does posting refer to in accounting?**

   - [ ] Recording transactions in the journal

   - [ ] Preparing financial statements

   - [ ] Reconciling bank statements

   - [x] Transferring entries from the journal to the ledger

3. Which side of the ledger account is the debit side?**

   - [ ] Right side

   - [x] Left side

   - [ ] Both sides

   - [ ] It varies

4. The ledger account of a customer from whom goods are sold on credit is called:

   - [ ] Purchase account

   - [ ] Sales account

   - [ ] Cash account

   - [x] Accounts receivable

5. A ledger account of a supplier from whom goods are bought on credit is called:

   - [ ] Sales account

   - [ ] Purchase account

   - [ ] Cash account

   - [x] Accounts payable

6.Which document is considered the book of original entry?

   - [ ] Ledger

   - [x] Journal

   - [ ] Balance sheet

   - [ ] Cash flow statement

7. What is a trial balance?

   - [ ] A financial statement

   - [x] A list of all ledger account balances

   - [ ] A record of all cash transactions

   - [ ] An income statement

8.Which of the following is not a part of a ledger?

   - [ ] Debit side

   - [ ] Credit side

   - [ ] Account title

   - [x] Bank statement

9. Closing entries are used to:

   - [ ] Open new accounts

   - [ ] Correct errors

   - [x] Transfer balances to the profit and loss account

   - [ ] Record daily transactions

10.A ledger folio column is used for:

    - [ ] Recording dates

    - [x] Referencing the journal entry page

    - [ ] Writing amounts

    - [ ] Descriptions

11.Which account will typically have a debit balance?

    - [ ] Accounts payable

    - [x] Accounts receivable

    - [ ] Sales

    - [ ] Capital

12.Which account will typically have a credit balance?

    - [ ] Cash

    - [ ] Inventory

    - [ ] Expenses

    - [x] Revenue

13.What is the purpose of a ledger account?

    - [ ] To record daily transactions

    - [x] To categorize and summarize financial data

    - [ ] To prepare the trial balance

    - [ ] To calculate net income

14.Which of the following is true about double-entry bookkeeping?

    - [x] Each transaction affects at least two accounts

    - [ ] Only one account is affected per transaction

    - [ ] It doesn't require balancing

    - [ ] It is only used for large businesses

15.What does the term 'ledger balance' refer to?

    - [ ] The balance in the journal

    - [ ] The balance in the trial balance

    - [ ] The balance in the profit and loss statement

    - [x] The balance of a specific account in the ledger

11.Which account is credited when cash is received from a debtor?**

   - [ ] Debtor’s account

   - [x] Cash account

   - [ ] Sales account

   - [ ] Purchase account

12.What is the primary purpose of the ledger?**

   - [ ] To record transactions

   - [ ] To prepare the balance sheet

   - [ ] To calculate depreciation

   - [x] To classify and summarize financial information

13.What is meant by the term "balancing a ledger account"?

   - [ ] Making sure each entry is correct

   - [ ] Verifying each transaction

   - [x] Calculating the difference between the debit and credit sides

   - [ ] Preparing the trial balance

14.What type of ledger contains individual accounts for customers and suppliers?

   - [ ] General ledger

   - [x] Subsidiary ledger

   - [ ] Special ledger

   - [ ] Control ledger

15.Which account is debited when goods are purchased on credit?

   - [ ] Cash account

   - [x] Purchase account

   - [ ] Sales account

   - [ ] Debtors account

16. **What is a contra entry?

   - [ ] An entry that corrects an error

   - [x] An entry that affects both the debit and credit side equally

   - [ ] An entry in the profit and loss statement

   - [ ] An entry in the balance sheet

7. **Where are nominal accounts closed?**

   - [ ] Balance sheet

   - [ ] Cash flow statement

   - [x] Profit and loss account

   - [ ] Journal

8. **What is a ledger control account?**

   - [x] An account that summarizes subsidiary ledger balances

   - [ ] An account used to control cash flow

   - [ ] An account for recording errors

   - [ ] An account for adjusting entries

9. **In a ledger, which side are revenues recorded on?**

   - [ ] Debit

   - [x] Credit

   - [ ] Both sides

   - [ ] None of the above

10. **When a company pays its suppliers, which account is debited?**

    - [x] Accounts payable

    - [ ] Accounts receivable

    - [ ] Revenue

    - [ ] Expense

11. **What is the correct entry when recording depreciation?**

    - [ ] Debit cash, credit expense

    - [x] Debit depreciation expense, credit accumulated depreciation

    - [ ] Debit accumulated depreciation, credit expense

    - [ ] Debit expense, credit cash

12. **What is the normal balance of an expense account?**

    - [ ] Credit

    - [x] Debit

    - [ ] Zero

    - [ ] Varies

13. **Which of the following is true about a trial balance?**

    - [ ] It proves the accuracy of the books

    - [ ] It shows the profit or loss

    - [x] It lists all the ledger accounts and their balances

    - [ ] It only lists revenue and expenses

14. **Which of the following will not appear in a ledger?**

    - [x] Bank reconciliation statement

    - [ ] Debtors account

    - [ ] Creditors account

    - [ ] Cash account

15. **What does the abbreviation "Dr." stand for in accounting?**

    - [ ] Draw

    - [ ] Deposit receipt

    - [x] Debit

    - [ ] Deficit

### Set 3:

1. **Which of the following is a real account?**

   - [ ] Sales account

   - [x] Land and building account

   - [ ] Rent expense account

   - [ ] Interest income account

2. **When goods are returned by a customer, which account is debited?**

   - [x] Sales return account

   - [ ] Purchase return account

   - [ ] Cash account

   - [ ] Inventory account

3. **The ledger account that contains the financial transactions of a specific customer is known as:**

   - [ ] General ledger

   - [ ] Cash ledger

   - [x] Personal ledger

   - [ ] Control ledger

4. **What does a credit balance in an asset account indicate?**

   - [x] A reduction in the asset

   - [ ] An increase in the asset

   - [ ] No change in the asset

   - [ ] An error in the account

5. **In accounting, which of the following is always true?**

   - [ ] Total debits equal total expenses

   - [x] Total debits equal total credits

   - [ ] Total credits equal total revenues

   - [ ] Total debits equal total liabilities

6. **What is an opening balance?**

   - [ ] Balance at the end of the period

   - [x] Balance at the beginning of the period

   - [ ] Balance after adjusting entries

   - [ ] Balance after closing entries

7. **Which account is typically credited when revenue is earned?**

   - [ ] Expense account

   - [x] Revenue account

   - [ ] Asset account

   - [ ] Liability account

8. **Which of the following best describes the purpose of closing entries?**

   - [ ] To record daily transactions

   - [ ] To prepare the trial balance

   - [ ] To correct errors

   - [x] To transfer temporary account balances to permanent accounts

9. **Which type of account is the capital account?**

   - [x] Owner's equity

   - [ ] Asset

   - [ ] Liability

   - [ ] Revenue

10. **Which of the following is recorded on the credit side of a ledger account?**

    - [ ] An increase in assets

    - [ ] An increase in expenses

    - [x] An increase in liabilities

    - [ ] A decrease in revenue