General Ledger Q&A

True Tamplin

Written by True Tamplin, BSc, CEPF®
Updated on March 25, 2022

Test your learning about the general ledger by answering the 10 short questions given below. We suggest that you try to answer each question yourself before clicking on the “See answer” button.

If you find it difficult to answer any of these questions, read the article on the general ledger from the explanation section of this website.

1. What is a ledger?

2. What is meant by posting?

3. What is meant by balancing?

4. What methods are used to prepare ledger accounts?

5. What is meant by balance?

6. What is difference between debit balance and credit balance?

7. What is meant by zero balance?

8. What abbreviations are used for debit and credit?

9. A ledger account has two sides: a left side and a right side. In bookkeeping and accounting, what are these two sides called?

10. What is meant by the term "posting reference" (PR) in relation to a ledger account?

Frequently Asked Questions

What is a General Ledger?

A General Ledger (GL) is a Financial Statement that shows the various assets, liabilities, and equity of a company at a given point in time. The GL can be used to track overall performance, assess the financial position, and make business decisions.

What are the benefits of using a General Ledger?

The GL receives input from all of a company’s accounting transactions, including account entries, payments, and receipts. It then calculates balances for each account and produces Financial Statements.

What are the benefits of using a General Ledger?

What are the benefits of using a General Ledger?

What are some common General Ledger functions?

Some common functions of a General Ledger include recording transactions, preparing Financial Statements, and reconciling accounts. Additionally, a GL can help manage budgeting and Cash Flow processes.

How do I get started using a General Ledger?

To get started using a General Ledger, you’ll need to set up your account and create journal entries. You can then use this information to produce Financial Statements.

True Tamplin, BSc, CEPF®

About the Author
True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.

2 thoughts on "General Ledger Q&A"

  1. BR started a business on 1 May and, during the first month, entered into
    the following transactions:
    1 May BR starts business as a sole proprietor with $20,000 in
    2 May Pays $15,000 cash into a business bank account
    4 May Purchases goods on credit from JM for $2,000
    6 May Purchases goods from ERD on credit for $3,000
    7 May Pays wages in cash $60
    10 May Pays rent by cheque $80
    12 May Sells goods for cash $210
    16 May Buys furniture for $1,500 paying by cheque
    19 May Sells goods on credit to SP for $580
    22 May Buys goods for cash $3,900
    24 May Buys fittings for cash $600
    Pays carriage outwards costs by cheque $25
    25 May Pays wages by cash $110
    Sells goods for cash $430
    27 May Receives part payment from SP of $330 by cheque
    Pays carriage inwards costs by cheque $20
    28 May Pays advertising by cheque $25
    Sells goods for cash $890
    29 May Sells goods on credit to KM for $8,090
    30 May Withdraws $100 cash for his personal use
    Ledger Accounting and Double-Entry Bookkeeping
    Illustration 2
    Test your understanding 2
    Prepare ledger account entries to record the transactions.
    Note: When you draw up your accounts, you may want to leave extra
    lines after the bank account (approx 10), and after all other ledger
    accounts (approx 4 per account) – this exercise is continued in chapter
    Note: It might help you to determine the correct ledger entries by
    completing a table before you start, like this (the first item is done for
    Date Names of
    Type of
    Increase/decrease Debit/credit
    Cash Asset Increase Debit
    Capital Capital Increase Cre

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