The general ledger

Question 1

Name the 3 characteristics of Statement of income/ nominal accounts when it comes to general ledger:

Answer 1

1) Records the year-to-date balance of the account.
2) Accounts go back to zero balance at the beginning of each financial years.
3) Income increases on the credit side and expenses increase on the right hand side.

Question 2

Name the 3 characteristics of Statement of Financial position accounts when it comes to general ledger:

Answer 2

1) Records the ongoing balance of the account.
2) Accounts are not affected by year end. For example, your bank balance does not go back to zero at year-end.

Question 3

Give the description for the follow type of account in the general ledger:
* Revenue

Answer 3

~ Sales
~ Discount received
~ Interest received
~ Rental income

Question 4

Give the description for the follow type of account in the general ledger:
* Cost of sales

Answer 4

~ Cost of sales

Question 5

Give the description for the follow type of account in the general ledger:
* Expenses

Answer 5

~ Accounting fees
~ Advertising
~ Bank charges
~ Cleaning materials
~ Discount allowed
~ Donations
~ Duty Fees
~ Electricity and water
~ Fines
~ Insurance
~ Interest paid
~ Levies
~ Motor vehicle expenses
~ Printing and stationary
~ Postage
~ Rent paid
~ Salaries and wages
~ Staff refreshments
~ Telephone

Question 6

Give the description for the follow type of account in the general ledger:
* Owner’s equity

Answer 6

~ Retained income
~ Capital
~ Drawings

Question 7

Give the description for the follow type of account in the general ledger:
* Fixed Assets

Answer 7

~ Funiture and fittings
~ Land and buildings
~ Motor vehicles
~ Plant and machinery
~ Computers

Question 8

Give the description for the follow type of account in the general ledger:
* Current Assests

Answer 8

~ Bank account
~ Inventory/ Stock
~ Debtors/ Customers/ Accounts receivable
~ Petty cash
Deposit paid

Question 9

Give the description for the follow type of account in the general ledger:
* Long Term Liabilities

Answer 9

~ Long term loans
~ Instalment sale creditors

Question 10

Give the description for the follow type of account in the general ledger:
* Short term liabilities

Answer 10

~ Creditors/ suppliers/ accounts payable Vat control
~ Short term loans

Question 11

Give the two subsidiary journals that are posted to the bank account

Answer 11

~ Cash receipts journal
~ Cash Payments journal

Question 12

What does “Double entry” mean?

Answer 12

For every debit entry there must be a credit entry, and vice versa.