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JAMB Principles of Accounts 2016 Question 3

Question 3

Double Entry and the Ledger

One major advantage of a ledger is that it

  1. A.is a book of original entry
  2. B.is only accessible to shareholders during liquidation
  3. C.can be used by any type of business
  4. D.removes the need for preparing a balance sheet after each transaction
Show the answer and explanation

Answer: C (can be used by any type of business)

Explanation

Every kind of business, big or small, can keep its accounts in a ledger. A ledger is not a book of original entry.