Question

Which of the following is the record holding all the accounts, the changes in those accounts, and their balances?

1) General Ledger
2) Trial Balance
3) Income Statement
4) Balance Sheet

Answer 1

The General Ledger is the record holding all the accounts, the changes in those accounts, and their balances, including for a hypothetical bank like Singleton Bank holding $10 million in deposits.

Step-by-step explanation:

The record holding all the accounts, the changes in those accounts, and their balances is known as the General Ledger. Unlike a balance sheet that provides a snapshot of a company's financial position at a specific point in time, the General Ledger includes all the transactions over the life of the organization. As for Singleton Bank, when it holds the $10 million in deposits in its vaults, the record of this, including any loans made from those deposits, would be located in the General Ledger. However, the interest earned or paid on those loans or deposits would not be applicable in this simplified scenario, as mentioned. Even if the bank cannot earn an interest income, the General Ledger is still essential for recording all transactional changes and balances within the bank's accounts.