NIOS Class 12 Accountancy Chapter 6 Ledger Solutions English Medium As Per New Syllabus. to each chapter is provided in the list so that you can easily browse throughout different chapters NIOS Class 12 Accountancy Chapter 6 Ledger Notes and select need one. NIOS Class 12 Accountancy Chapter 6 Ledger Question Answers Download PDF. NIOS Study Material of Class 12 Accountancy Paper Code: 320.
NIOS Class 12 Accountancy Chapter 6 Ledger
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Ledger
Chapter: 6
| Module – 1: Basic Accounting |
INTEXT QUESTIONS 6.1
I. Fill in the blanks with a suitable word or words:
(i) Ledger contains various ___________ in it.
Ans: Accounts.
(ii) The process of transfer of entries from Journal and special purpose books to ledger is called __________.
Ans: Posting.
(iii) Ledger is also called __________.
Ans: Principal Book of Account.
(iv) Ledger is a _________ book of accounting system.
Ans: Reference.
II. Match the column A with column B :
| A | B |
| (i) Book containing accounts | (a) Ledger |
| (ii) Pages number of the ledger | (b) Liabilities ledger |
| (iii) Machinery account, Building account, Furniture Accounts, etc. | (c) Revenue ledger |
| (iv) Loan’s account, Bank overdraft account, etc. | (d) Expenses ledger |
| (v) Rent paid, wages paid, electricity charges. | (e) Folio |
| (vi) Sales account, commission account, interest received account etc. | (f) Assets ledger |
Ans:
| A | B |
| (i) Book containing accounts | (a) Ledger |
| (ii) Pages number of the ledger | (e) Folio |
| (iii) Machinery account, Building account, Furniture Accounts, etc. | (f) Assets ledger |
| (iv) Loan’s account, Bank overdraft account, etc. | (b) Liabilities ledger |
| (v) Rent paid, wages paid, electricity charges. | (d) Expenses ledger |
| (vi) Sales account, commission account, interest received account etc. | (c) Revenue ledger |
INTEXT QUESTIONS 6.2
I. State the meaning of ledger posting :
Ans: Taking the items from the journal to the relevant account in the ledger is called ledger posting.
II. Following are the steps of posting of journal to ledger but are not in proper order. Write them in correct order :
(i) Write the page number of journal in the JF column of ledger and that of ledger on which account has been taken from journal.
(ii) Identify the two affected accounts in the journal and open these accounts in the ledger.
(iii) Take date and amount of the debit account, and name of the credit account from journal to ledger in their respective columns.
(iv) While posting the credit account from journal in the ledger write page number of the journal from which item is taken to ledger in JF column of ledger and page number of ledger on which item is taken on the LF column of the journal.
Ans: The correct order of steps is (ii), (iii), (i), and then (iv).
INTEXT QUESTIONS 6.3
I. Fill in the blanks with suitable word/words :
(i) The debit accounts from the journal are entered on the ___________ side of respective account in the ledger.
Ans: credit.
(ii) The ___________ of the account in the ledger should be the same as that is used in the Journal.
Ans: Name.
(iii) The page number of the journal is entered in the ___________ column in the ledger account.
Ans: Jf.
(iv) The figures appearing in the amount column of the ___________ and the amount column of the respective ___________ in the ledger must be the same.
Ans: The figures appearing in the amount column of the journal and the amount column of the respective account in the ledger must be the same.
II. Fill in the blanks with suitable word or words :
(i) The balance of asset accounts are _________ balance.
Ans: Debit.
(ii) The balance of liability accounts are always ________ balance.
Ans: Credit.
(iii) The capital Account generally has __________ balance.
Ans: Credit.
(iv) The Revenue and expense accounts are closed by taking the balances to ________.
Ans: Trading and Profit and Loss A/c.
| TERMINAL EXERCISE |
1. What is meant by ledger? Why is ledger prepared?
Ans: All the accounts identified on the basis of transactions recorded in different journals/ books such as Cash Book, Purchase Book, Sales Book etc. will be opened and maintained in a separate book called Ledger. So a ledger is a book of account; in which all types of accounts relating to assets, liabilities, capital, expenses and revenues are maintained. It is a complete set of accounts of a business enterprise.
Ledger is prepared to classify and summarise the transactions recorded in the journal into different accounts, so as to know the position of each account and to facilitate the preparation of final accounts.
2. Why is ledger known as the primary book or the principal book of accounts? Can profit of the business and its financial position be known without maintaining ledger?
Ans: The ledger is known as the principal book of accounts because it is the book of final entry where all transactions recorded in the journal are classified and posted into respective accounts. It provides complete information about each account.
Profit and financial position cannot be easily known without maintaining a ledger, as it helps in classifying and summarising transactions, which is necessary for the preparation of financial statements like the Profit and Loss Account and Balance Sheet.
3. Enumerate the various types of ledgers which may be maintained by a business.
Ans: In large scale business organisations, the number of accounts may be very large, so it is not possible to maintain all accounts in one ledger.
Therefore, different types of ledgers are maintained:
(i) Assets Ledger: It contains accounts relating to assets such as Machinery, Building, Furniture, etc.
(ii) Liabilities Ledger: It contains accounts of liabilities such as Capital, Loan, Bank overdraft, etc.
(iii) Revenue Ledger: It contains revenue accounts such as Sales, Commission earned, Rent received, Interest received, etc.
(iv) Expenses Ledger: It contains accounts of expenses such as Wages, Rent paid, Electricity charges, etc.
(v) Debtors Ledger: It contains accounts of individual trade debtors to whom goods are sold on credit.
(vi) Creditors Ledger: It contains accounts of individual trade creditors from whom goods are purchased on credit.
(vii) General Ledger: It contains all other accounts not included in the above ledgers, such as Landlord A/c, Prepaid Insurance A/c, etc.
4. What is the rule for posting the debit account from the journal into the ledger account?
Ans: Posting means transferring the items from journal to the relevant accounts in the ledger.
The following procedure is followed:
(i) Identify both the accounts ‘debit’ and ‘credit’ in the journal entry and open these accounts in the ledger.
(ii) Post the item in the first account by writing the date in the date column, name of the account to be credited in the particulars column, and the amount in the debit side of the account.
(iii) Write the page number of the journal in the folio column of the ledger and the page number of the ledger in the L.F. column of the journal.
(iv) Take the second account and give similar treatment by writing the date, name of the account to be debited in the particulars column, and the amount on the credit side of the account.
(v) Again write the page number of the journal in the folio column of the ledger and the page number of the ledger in the L.F. column of the journal.
5. What is the rule for posting the credit items of the journal into the ledger accounts?
Ans: The rule for posting the credit items of the journal into the ledger is as follows:
(i) The credit items are posted on the credit side of the respective account in the ledger.
(ii) The date is written in the date column.
(iii) The name of the account to be debited is written in the particulars column.
(iv) The amount is written in the credit side of the ledger account.
(v) The journal page number is written in the folio column of the ledger and the ledger page number is written in the L.F. column of the journal.
6. What are the advantages of maintaining a ledger?
Ans: Advantages of Ledger:
(i) Knowledge of Business Results: Ledger provides information about revenues and expenses at one place, which helps in determining the business results by matching them.
(ii) Knowledge of Book Value of Assets: Ledger records each asset separately, so the book value of any asset can be known easily.
(iii) Useful for Management: Information from ledger accounts helps management in preparing budgets and controlling business performance.
(iv) Knowledge of Financial Position: Ledger provides details of assets and liabilities, which helps in judging the financial position of the business.
(v) Instant Information: Ledger provides quick information about what the business owes and what others owe to the business through receivables and payables.
7. What is meant by balancing of an account? Explain the various steps taken while balancing accounts.
Ans: Balancing of an account is the process of finding out the difference between the total of debits and total of credits of an account. If debit side total is more than the credit side, the account shows a debit balance. Similarly, the balance will be credit balance if the credit side total of an account is more than the debit side total. This process of ascertaining and writing the balance of each account in the ledger is called balancing of an account. An account has two sides : debit and credit. Items by which this account is debited are entered on its debit side with their amounts and items by which this account is credited are entered on its credit side with their amounts so all items related to an account are shown at one place in the ledger. But then you would like to know the net effect of this account i.e. the balance between its debit amount and credit amount.
The following steps are followed in balancing a ledger account:
(i) Total the two sides of an account on a rough sheet.
(ii) Determine the difference between the two sides. If the credit side is more than the debit side, the balance is a credit balance.
(iii) Put the difference on the shorter side of the account so that both sides become equal.
(iv) If the difference is written on the debit side (i.e., credit side is bigger), write it as “Balance c/d”. If the difference is written on the credit side (i.e., debit side is bigger), also write it as “Balance c/d”.
(v) At the end of the year, all ledger accounts are closed by taking out the balance of each account.
(vi) The balance is then brought down to the next period. If the balance is on the credit side as “Balance c/d”, it is written on the debit side as “Balance b/d”, and vice versa. Thus, debit balance is brought on the debit side and credit balance on the credit side.
8. How do we balance the following types of accounts?
(a) Assets.
Ans: All asset accounts are balanced and they always show a debit balance.
(b) Expense.
Ans: Expense accounts are not balanced but are simply totalled, and the debit total shows the amount of expense.
(c) Capital.
Ans: Capital account is always balanced and generally shows a credit balance.
(d) Revenue.
Ans: Revenue accounts are not balanced but are totalled, and the credit total shows the amount of income.
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