Accounting · Subsidiary Books and Ledger

Evaluate the validity of the following statements regarding accounting principles and practices: Statement 1: The Ledger provides a chronological record of all transactions, making it the most useful tool for identifying the sequence of events during a bank's daily operations. Statement 2: Subsidiary books are used primarily to reduce the bulk of the General Ledger and to allow for the categorization of similar transactions into specialized journals. Statement 3: A Contra Entry in a two-column cash book (Cash and Bank) does not require a separate posting to the ledger because the double entry is completed within the cash book itself. Statement 4: The Purchase Book records all credit transactions of the business, including the purchase of stationery, office equipment, and raw materials. Statement 5: Posting from the credit side of the Cash Book to the Ledger involves debiting the respective expense or asset accounts. Statement 6: The total of the Bills Receivable Book is posted to the credit of the Bills Receivable Account at the end of each month. Statement 7: A Petty Cash Book is a ledger account and also a book of prime entry, similar to the main Cash Book.