Which of the following is an INCORRECT pair, in the context of the Adjustment Account given in General Ledger under self-balancing ledger system?
Provision for bad debts - appear on credit side of debtors ledgers adjustment account
The correct answer is option 4. "Provision for bad debts" is incorrectly stated in the context of appearing on the credit side of the debtors ledgers adjustment account. Provision for bad debts is actually shown on the debit side of the debtors' ledger adjustment account as it is an estimate of potential losses from bad debts. This provision is typically made for expected defaults on payments, and it reduces the overall value of receivables.
Important Questions from Self Balancing Ledger System
Which of the following statements is INCORRECT in relation to Self-Balancing Ledger system?
Which of the given options best describes the truthfulness of the following statements?
Statement-1: Under Self Balancing Ledger system each ledger is prepared under double entry system and a complete trial balance can also be prepared by taking up the balances of ledger accounts.
Statement-2: Under Self Balancing Ledger system three ledger accounts are prepared, viz. General Ledger Adjustment Account, which is maintained under Debtors Ledger and Creditors Ledger and Debtors or Sales Ledger Adjustment Account and Creditors or Purchase Ledger Adjustments Accounts, which are maintained under General Ledger.
Self-balancing entries will only be made for those transactions which affect ______.
Which one of the following entry will be passed for ‘credit sales’ under self balancing ledger system?
Which of the following is/are INCORRECT match(es) of the account maintained in the context of self-balancing ledgers?
(i) Bought ledger adjustment account - Total creditors account
(ii) Sales ledger adjustment account - Total debtors account
