What is the primary purpose of a ledger in accounting?
Correct answer: A. To classify transactions into individual accounts
- A. To classify transactions into individual accounts
- B. To record transactions only in date order
- C. To calculate cash collections for the period
- D. To prepare invoices for credit customers
Explanation
A ledger classifies recorded transactions into separate accounts, such as cash, sales, purchases, and capital. A journal records transactions mainly in chronological order, while invoices and cash collection records serve different purposes.
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About Ledger Accounts and the Trial Balance
Ledger accounts collect transactions under individual headings and use debit and credit sides to determine balances. The trial balance lists those balances to check arithmetical agreement before financial statements are prepared, but it does not reveal every error, such as complete omission, compensating errors or entries made in the wrong account.
Practise Ledger Accounts and the Trial Balance
34 free Ledger Accounts and the Trial Balance MCQs from Accounting, each with the correct answer and an explanation. Unlimited attempts, no account needed.
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