Which of the following statements is true?
A. An entry in a general ledger account can be traced to the trial balance by referring to the page listed in the posting reference column of that ledger account.
B. The posting of an amount recorded in the general ledger can be verified by referring to the account number listed in the posting reference column on that line in the general journal.
C. Business transactions are recorded first in the general ledger, then that information is transferred to the general journal.
D. No explanation is needed for any entry in the general journal.
The correct answer and explanation is :
The correct answer is:
B. The posting of an amount recorded in the general ledger can be verified by referring to the account number listed in the posting reference column on that line in the general journal.
Here’s why each statement is right or wrong:
- A – Incorrect: The posting reference in the general ledger shows the source journal page (e.g., general journal page number), not the other way around. The trial balance is not directly referenced in the ledger’s posting reference column.
- **B – *✅* Correct:** In the general journal, after a transaction is posted to the general ledger, the posting reference column is filled with the account number from the ledger. This allows users to trace the entry back to the ledger.
- C – Incorrect: Transactions are first recorded in the general journal (the book of original entry), then posted to the general ledger, not the other way around.
- D – Incorrect: An explanation (narration) is generally required for each journal entry to describe the transaction being recorded.