16.2. Ledger

Try these first

1. 1.

   What is the primary book of accounts in accounting?

   Hint

   Think about the book where financial summaries are maintained.

2. 2.

   What are the two sides of a ledger account?

   Hint

   Consider a T-shaped format.

3. 3.

   What is the purpose of a ledger?

   • To record transactions in chronological order
   • To classify and summarize transactions
   • To prepare tax returns

   Hint

   Focus on how information is organized.

4. 4.

   The debit side of a ledger is used for recording which of the following?

   • Increases in revenue
   • Increases in expenses
   • Decreases in assets

   Hint

   Consider what happens to accounts when they increase.

5. 5.

   A firm has the following journal entries in July: Cash Sale of ₹10,000, Purchase of equipment for ₹5,000. Record these in the respective ledger accounts and ensure the totals balance.

   Hint

   Remember to keep track of which accounts increase or decrease.

6. 6.

   An accountant found that a ₹2,000 cash payment made on account was recorded as a 'Credit' rather than a 'Debit'. What steps should the accountant take to correct this error in the ledger?

   Hint

   Think about how errors impact account balances!