Steps To Extract Balances From A Ledger Account - SS1 Accounting Past Questions and Answers - page 1
What is the first step in extracting balances from a ledger account?
Review the account transactions
Determine the balance of the account
Identify the account type
Identify the account you want to extract the balance from
What is the purpose of extracting balances from a ledger account?
To identify the account type
To determine the balance of the account at a specific point in time
To review the transactions that have been recorded in the ledger account
To increase the balance of the account
Which of the following is an account that may be important for financial reporting?
Telephone expenses
Employee salaries
Cash
Office Supplies
How do you determine the balance of a ledger account?
By identifying the account type
By reviewing the account transactions
By adding up all the transactions recorded in the account up to a specific date
By analyzing the transactions recorded in the account
Which of the following account types has a credit balance?
Accounts receivable
Inventory
Accounts payable
Cash
What is the purpose of analyzing the transactions recorded in a ledger account?
The purpose of analyzing the transactions recorded in a ledger account is to determine the balance of the account at a specific point in time.
How do you identify whether an account has a debit or credit balance?
Accounts that increase with a debit entry and decrease with a credit entry are considered to have a debit balance. Similarly, accounts that increase with a credit entry and decrease with a debit entry are considered to have a credit balance.