Question

Which of the following is true of the relationship between subsidiary ledgers and general ledger accounts? 

a. The two contain different and unrelated data. 

b. The relationship between the two constitute part of the audit trail. 

c. All general ledger accounts have subsidiaries. 

d. The total of subsidiary ledger accounts usually exceeds the total in the related general ledger account. 

 

Answer 1

The statement that is true of the relationship between subsidiary ledgers and general ledger accounts is:

 

b. The relationship between the two constitutes part of the audit trail.

 

Explanation:

Subsidiary ledgers provide detailed information on specific categories within an account, while the general ledger contains summarized information for all accounts. The relationship between the detailed data in subsidiary ledgers and the summarized data in the general ledger is an essential part of the audit trail, allowing auditors to trace transactions from the detailed level to the summarized level for verification and validation.

The statement that is true of the relationship between subsidiary ledgers and general ledger accounts is: (b).