Accounting Q&A · Financial Accounting · Topic 9
A journal entry records both sides of a transaction. The ledger lets you follow what happens to each account after posting.
25 short-answer questions. Try each question before revealing the answer.
Worked Cash ledger
| Activity | Debit | Credit | Balance |
|---|---|---|---|
| Opening | 1,250 Dr | ||
| Receipt | 430 | 1,680 Dr | |
| Payment | 280 | 1,400 Dr |
Amounts are in currency units. Use the Ledger quiz for more practice.
Ledger and posting basics
1. What is a ledger?
The ledger groups posted transactions by account so you can see the activity and balance of each account.
2. How does the ledger differ from the journal?
The journal lists complete entries in date order. The ledger shows the postings that affect each individual account.
3. What does posting mean?
Posting transfers each debit and credit from a journal entry to the corresponding ledger account.
4. What does a general ledger contain?
It contains the accounts used to prepare the trial balance and financial statements, such as Cash, Accounts Receivable and Sales.
5. What is a subsidiary ledger?
It holds detailed records supporting a general ledger account, such as the individual balances of customers.
6. What is a control account?
It summarises balances recorded in a subsidiary ledger. The total of the individual customer balances should reconcile to the Accounts Receivable control account.
7. What does a posting reference help you do?
It links the ledger line to the journal entry or source record so a reviewer can trace the posting.
8. Where do debits and credits go in a T-account?
Debits go on the left and credits on the right.
9. How does a running-balance ledger differ from a T-account?
It shows the updated balance after each posting. A T-account places debit and credit activity in separate columns for comparison.
Worked postings and balances
10. How do you post a cash sale of 650?
Post a 650 debit to Cash and a 650 credit to Sales Revenue. Under perpetual inventory, post the inventory cost separately when applicable.
11. How do you post payment of 240 against a supplier balance?
Debit Accounts Payable 240 and credit Cash 240. The posting reduces both the supplier liability and cash.
12. How do you post a compound entry for a 560 loan payment that includes 60 of current interest?
Debit Loan Payable 500, debit Interest Expense 60 and credit Cash 560, assuming the interest was not previously accrued.
13. How do you post 180 of equipment depreciation?
Debit Depreciation Expense 180 and credit Accumulated Depreciation 180.
14. Cash starts at 1,250 debit. Receipts are 430 and payments are 280. What is the closing balance?
1,400 debit. Add the receipts and subtract the payments.
15. Accounts Payable starts at 1,600 credit. Credit purchases are 720 and payments are 900. What is the closing balance?
1,420 credit. Add the purchases and subtract the payments.
16. Total debits are 3,850 and total credits are 3,100. What is the account balance?
750 debit. The balance is the difference and takes the side with the larger total.
17. Where does balance carried down go when an account has a 750 debit balance?
Enter 750 on the credit side to make the columns equal. Bring it down on the debit side as the next period’s opening balance.
18. Which balances usually carry forward?
Asset, liability and equity balances generally carry forward. Revenue and expense accounts are closed for the period and affect equity through the result.
Trial balance and error checks
19. How do ledger balances feed the trial balance?
List each ledger account’s ending debit or credit balance in the corresponding trial balance column, then compare the totals.
20. Does a balanced trial balance confirm every posting is correct?
It confirms debit and credit totals agree. An omitted entry or a posting to the wrong account on the correct side can still leave it balanced.
21. A 360 journal credit was posted to the ledger as 630. What difference does this cause?
Credits are overstated by 270. Compare the journal amount with the ledger line and correct the excess credit.
22. What happens if the debit side of an 85 entry is omitted?
Total credits exceed total debits by 85, assuming all other entries are correct.
23. The receivables control account shows 4,800 but customer balances total 4,650. What should you do?
Investigate the 150 difference. Compare posting dates and trace invoices, receipts and credits before making a correction.
24. How do you correct a 200 debit posted to the wrong expense account?
Debit the correct expense account 200 and credit the expense account used in error 200, assuming the original credit was correct.
25. What is a practical sequence for checking a ledger posting?
Trace the source document to the journal and ledger. Verify the date, account, side and amount, then recalculate the balance.