The main purpose of preparing a 'Ledger' is: MCQ with Answer and Explanation

Question
The main purpose of preparing a 'Ledger' is:
A. To ascertain profit or loss
B. To detect errors
C. To classify and summarise transactions account-wise
D. To record transactions chronologically
Answer: Option C
Solution (By JKSSB Mock Tests)
Ledger is the principal book where all transactions are classified into various accounts.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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Question #1
In standard costing, if the actual material mix is changed due to a shortage of a specific material, how should the Material Mix Variance be calculated?
A. Using the revised standard mix
B. It cannot be calculated
C. Using the actual mix
D. Using the original standard mix
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Correct Answer: Option A

Explanation:
When there is a shortage of a material and the actual mix is altered, the Material Mix Variance must be calculated using the Revised Standard Mix, not the original standard mix.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
In the context of the Trial Balance, which of the following is correct?
A. It is prepared at the beginning of the year.
B. It provides a summary of all ledger balances.
C. It proves that no errors have been made.
D. It is an account in the ledger.
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Correct Answer: Option B

Explanation:
A Trial Balance is a statement (not an account) that summarizes all ledger balances to check arithmetical accuracy.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
If opening capital is Rs 1,00,000, closing capital is Rs 1,50,000, and drawings are Rs 20,000, what is the profit for the year assuming no additional capital?
A. Rs 70,000
B. Rs 50,000
C. Rs 1,70,000
D. Rs 30,000
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Correct Answer: Option A

Explanation:
Profit = Closing Capital + Drawings - Opening Capital. Profit = 1,50,000 + 20,000 - 1,00,000 = Rs 70,000.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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