Maintenance of Cash / Subsidiary Books and Ledger
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Accounting and Financial Management for Bankers — JAIIB.
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Free sample — 8 of 66 rapid-fire Q&A cards.
What is the primary objective of bookkeeping and accounting?
The primary objective is the systematic recording of business transactions to ascertain the financial position of the business on a given date and determine profit or loss for a period.
What does L.F. stand for in the journal format, and when is it filled in?
L.F. stands for Ledger Folio (the page number in the ledger); it is filled in only after the entry is posted to the ledger.
What is the key distinction between bookkeeping and accounting?
Bookkeeping is only the recording stage, while accounting is the broader process covering recording, classifying, summarising, interpreting, and communicating financial data.
What does J.F. stand for in the ledger, and what information does it carry?
J.F. stands for Journal Folio — the page number of the journal where the entry was originally made.
What are the three sequential stages of the accounting cycle?
The three stages are Recording (entering transactions chronologically), Classifying (posting to ledger accounts), and Summarising (preparing trial balance and final accounts).
What entry words are used when a debit balance is carried down in a ledger account?
'By Balance c/d' is written on the credit side when the debit side total exceeds the credit side total.
Why is the journal called the 'book of original entry'?
The journal is called the book of original entry because every business transaction is first recorded here in the order (chronologically) in which it occurs.
What entry words are used when a credit balance is carried down in a ledger account?
'To Balance c/d' is written on the debit side when the credit side total exceeds the debit side total.
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