Question

Which format provides a running balance after each posted transaction?

A. T-account correct
B. Four-column ledger
C. Both are correct
D. None of the above

Answer 1

The format that provides a running balance after each posted transaction is the T-account.

Step-by-step explanation:

The format that provides a running balance after each posted transaction is the T-account.

A T-account is a balance sheet with a two-column format, where the T-shape is formed by the vertical line down the middle and the horizontal line under the column headings for 'Assets' and 'Liabilities'. With a T-account, you can easily track the balance of an account by adding or subtracting the amounts of each transaction.

For example, let's say you have a T-account for a bank account. The account starts with a balance of $100. If you deposit $50, you would add $50 to the 'Assets' column. If you then withdraw $25, you would subtract $25 from the 'Assets' column. This would give you a running balance after each posted transaction.