16.6. Summary

Try these first

1. 1.

   What is the primary purpose of the Journal?

   Hint

   Think about where transactions are first written down.

2. 2.

   Which accounting method does the Journal follow?

   Hint

   Remember, every entry must balance debits and credits.

3. 3.

   What is the main function of the Journal?

   • Is only to keep historical records
   • To record transactions chronologically
   • To summarize transactions

   Hint

   What does the Journal do as transactions happen?

4. 4.

   The Ledger helps in preparing which of the following?

   • Trial Balance
   • Cash Flow Statement
   • Income Statement

   Hint

   Think about what comes after classification.

5. 5.

   A company received a cash payment of ₹2,000 for services rendered but mistakenly recorded it only as a debit to Cash without a corresponding credit. How would this affect the Trial Balance?

   Hint

   Think about the principles of double-entry accounting.

6. 6.

   You need to prepare a Trial Balance from the following Ledger data: Cash A/c (Dr ₹3,000; Cr ₹1,000), Sales A/c (Dr ₹1,500; Cr ₹5,000). What is the total for both debits and credits?

   Hint

   Add up both sides of the Ledger accounts carefully.