After journal entries are posted, the reference column
a. of the general journal will be blank.
b. of the general ledger will show journal page numbers.
c. of the general journal will show “Dr” or “Cr”.
d. of the general ledger will show account numbers.
The correct answer and explanation is :
The correct answer is b. of the general ledger will show journal page numbers.
Explanation:
When journal entries are posted to the general ledger, the reference column in the general ledger is typically filled with the journal page numbers. This helps to create a direct link between the general ledger and the original journal entries, making it easier to trace and verify the details of transactions.
- General Journal:
The general journal is where transactions are initially recorded in chronological order. Each entry in the journal includes details like the date, accounts affected, amounts, and a brief description of the transaction. The reference column in the journal, before the entries are posted, may show a reference number, or it could be left blank if no posting has occurred yet. After posting, the reference column in the general journal could contain the page number or the journal entry number, showing where the information was transferred to the general ledger. - General Ledger:
The general ledger is a set of accounts used to track all of a company’s financial transactions. It’s organized by individual accounts (like Cash, Accounts Payable, Revenue, etc.). The reference column in the general ledger is used to note where the transaction came from — this is typically where the journal page number is recorded. For instance, if an entry in the general journal is on page 2, the general ledger for the respective accounts will refer to that page number, providing a clear link back to the original journal entry. - Purpose of Reference Column:
The reference column serves as an important tool for cross-referencing. It makes it easier for accountants, auditors, or others reviewing the financial records to trace entries from the journal to the ledger and ensure that everything is posted correctly. Without this system, it would be much harder to track down mistakes or discrepancies because each entry would be disconnected from its source. - Why Not Other Options?
- a. Blank in General Journal: This would not make sense, as the journal has to show where the information went after posting.
- c. “Dr” or “Cr” in General Journal: These represent the debit or credit sides of entries, not something placed in the reference column after posting.
- d. Account Numbers in General Ledger: While account numbers are important in identifying which account is being posted to, the reference column specifically links to the journal page number.
By maintaining journal page numbers in the reference column of the general ledger, companies ensure that their financial records are organized and traceable.