16.4. Relationship Between Journal, Ledger, and Trial Balance

Try these first

1. 1.

   What does the Journal record?

   Hint

   Think about the order in which business activities occur.

2. 2.

   What is the purpose of the Ledger?

   Hint

   Consider how data is structured in accounting.

3. 3.

   What order do the Journal, Ledger, and Trial Balance follow?

   • Ledger → Journal → Trial Balance
   • Journal → Ledger → Trial Balance
   • Trial Balance → Ledger → Journal

   Hint

   Consider the flow of data in accounting.

4. 4.

   True or False: The Ledger provides a summary of transactions.

   • True
   • False

   Hint

   Think about how data is grouped together.

5. 5.

   A company records a sale in the Journal for ₹5,000 cash. The corresponding entry in the Ledger is missed. How does this affect the Trial Balance?

   Hint

   Think about why both sides need to balance.

6. 6.

   If a transaction for Supplies purchased on credit is recorded as a cash sale, explain the overall effect on the Ledger and subsequently the Trial Balance.

   Hint

   Consider the implications of misclassifying entries.