Journal, Ledger and Trial Balance Questions and Answers

Answer: D

The keyed answer is the multiple column cash book. The cash books usually listed in textbooks are the simple (single column) cash book, the two column cash book (cash and discount, or cash and bank), the three column cash book (cash, bank and discount) and the petty cash book. Of the options, the first three belong to this standard list, so the multiple column cash book is the one given as not a type. This follows the printed key; it is a textbook-classification question and no other source was needed.

Answer: A

A journal is a book of original entry.

Transactions are first recorded in the journal in date order, with the accounts to be debited and credited. They are then posted from the journal to the ledger, which is why the ledger is called the principal book or book of final entry.

'Secondary entry' is the opposite of the journal's role. The cash book records cash transactions and the petty cash book small day-to-day expenses; these are subsidiary books, and the journal is not limited to either kind of transaction.

Answer: A

The suspense account is shown in the Balance Sheet.

When a trial balance does not agree and the errors cannot be found at once, the difference is put into a suspense account so that the books can be closed. If the errors are still not located when the final accounts are prepared, the suspense balance appears in the balance sheet: a debit balance on the assets side, a credit balance on the liabilities side.

It is not an income or expense, so it does not go into the trading account, the income statement or the profit and loss statement.

Answer: B

The arithmetical accuracy of the books is checked by the trial balance.

A trial balance lists the debit and credit balances of all ledger accounts on a date. Under double entry every debit has an equal credit, so the two totals must agree; if they do not, there is an arithmetical or posting error to find. Some errors, such as compensating errors or errors of omission, are not revealed even when it agrees.

The ledger holds the accounts themselves, the journal is the book of original entry, and the profit and loss account works out the profit, so none of them is a check of accuracy.