The Accounting Information System - Ledgers

Question 1

Where are the transactions in the journals posted to?

Answer 1

The ledgers.

Question 2

What is the use of the ledgers?

Answer 2

The ledgers keep the business transactions grouped by accounts. Similar transactions are grouped and recorded in the same ledger account.

Question 3

Explain what is meant by ‘posted to ledgers’.

Answer 3

Posted to ledgers is the act of recording transactions in the ledgers.

Question 4

Define ‘ledger’.

Answer 4

The ledger is a collection of books of accounts where entries of transactions recorded in journals are posted to.

Question 5

How many types of ledgers are there?

Answer 5

Two: General Ledger and Subsidiary Ledgers

Question 6

What can one find in the General Ledger?

Answer 6

All the ledger accounts except for the individual trade receivable (i.e. debtors) and individual trade payable (i.e. creditors) ledger accounts.

Question 7

List the related journals for the General Ledger.

Answer 7

All the journals:
Purchases Journal
Purchases Returns Journal
Sales Journal
Sales Returns Journal
Cash Book
General Journal

Question 8

List the two subsidiary ledgers.

Answer 8

1. Trade Receivables Ledger (also called Sales Ledger)

2. Trade Payables Ledger (also called Purchases Ledger)

Question 9

What does the Trade Receivables Ledger consist of?

Answer 9

All the individual trade receivable ledger accounts.

Question 10

Listed the related journals for the Trade Receivables Ledger.

Answer 10

Sales Journal
Sales Returns Journal
Cash Book
General Journal

Question 11

What does the Trade Payables Ledger consist of?

Answer 11

All the individual trade payable ledger accounts.

Question 12

List the related journals for the Trade Payables Ledger.

Answer 12

Purchases Journal
Purchases Returns Journal
Cash Book
General Journal

Question 13

What is the Trade Receivables Ledger also called / known as?

Answer 13

Sales Ledger

Question 14

What is the Trade Payables Ledger also called / known as?

Answer 14

Purchases Ledger

Question 15

Where are the amounts owing by the customers and amounts owing to the suppliers recorded in?

Answer 15

Individual trade receivable and trade payable accounts respectively.

Question 16

Why are these individual trade receivable and trade payable accounts not placed in the General Ledger?

Answer 16

1. These individual ledger accounts will clutter up the General Ledger since the bulk of the entries are made in the trade receivables (debtors) and trade payables (creditors) accounts.
2. To reduce the size of the General Ledger.

Question 17

Where are the individual trade receivable and trade payable accounts taken out and placed in?

Answer 17

Subsidiary Ledgers, i.e. Trade Receivables Ledger / Sales Ledger and Trade Payables Ledgers / Purchases Ledger.

Question 18

What are control accounts?

Answer 18

They refer to the total trade receivables ledger account and the total trade payables ledger account.

Question 19

What do the two control accounts contain?

Answer 19

The total amount of the individual trade receivable and trade payable accounts.

Question 20

Where are the total trade receivables ledger account and the total trade payables ledger account (which are also known as control accounts) found in?

Answer 20

The General Ledger.

Question 21

Which chapters of the textbook give a detailed explanation of the ledgers?

Answer 21

Chapters 4, 5 and 6.

Question 22

What chapter of the textbook explains further the function of control accounts?

Answer 22

Chapter 16.