Question
In: Accounting
why does a business hse a subsidairy ledger for accounts receivable? What types of information will...
why
does a business hse a subsidairy ledger for accounts receivable?
What types of information will be kept there?
Solutions
Expert Solution
The purpose of keeping subsidiary ledgers is for accuracy and efficiency. They aid us in keeping accurate records. Since the total of the accounts receivable subsidiary ledger must agree with the balance shown in the accounts receivable general ledger account, the system helps us find mistakes.
The main purpose of having an accounts receivable subsidiary ledger is to keep a record each individual customer's account. Each customer will have their own account within the ledger which records all the credit transactions between the customers and the business.
The accounts receivable subsidiary ledger shows the transactions and payment history of each customer that has been extended credit. The balance in the accounts receivable subsidiary ledger is reconciled with accounts receivables in the general ledger.
Subsidiary ledgers are used when there is a large amount of transaction information that would clutter up the general ledger. This situation typically arises in companies with significant sales volume. Thus, there is no need for a subsidiary ledger in a small company.
To prove the accounts receivable subsidiary ledger, the total of the schedule of accounts receivable is compared with the balance of the accounts receivable controlling account in the general ledger. The use of special amount columns eliminates the need to post individual amounts to general ledger accounts.
The accounts receivable ledger is a subledger in which is recorded all credit sales made by a business
ekkarill92 answered 1 year agoRelated Solutions
REQUIRED: Prepare General Ledger, Accounts Receivable Ledger, Accounts Payable Ledger, Trial Balance, Schedule of Accounts Receivable...
REQUIRED:
Prepare General Ledger, Accounts Receivable Ledger, Accounts
Payable Ledger, Trial Balance, Schedule of Accounts Receivable and
Schedule of Accounts Payable from the following information and
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Grassley Company completes these transactions during November of
the current year (terms for all its credits sales are 2/10,
n/30).
Nov.1 Purchased $5,058 of office equipment on credit from Brun
supply, invoice dated November 1, terms n/10 EOM.
2 Borrowed $88, 500 cash from Wisconsin Bank...
Why does the write-off of uncollectible accounts have no effect on the accounts receivable on the...
Why does the write-off of uncollectible accounts have no effect
on the accounts receivable on the balance sheet if bad debts are
estimated? If not directly written off as bad debts expense how
does a company properly recognize uncollectible receivable activity
on the income statement? Why are controls over the cash asset so
important? What risks exist if adequate controls are not in place?
Why is it important to distinguish between current assets and long
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Hide Folder Information Instructions What is The Importance Of Analyzing Accounts Receivable. Accounts Receivable Financing :...
Hide Folder Information
Instructions
What is The Importance Of Analyzing Accounts
Receivable.
Accounts Receivable Financing : An
alternative to bank financing for your small business
DISCUSS THE ABOVE STATEMENT BY TAKING EXAMPLE OF BUSINESS
ORGANIZATION OF YOUR CHOICE.
A chart of accounts for a business: Select one: a. lists the accounts in the ledger....
A chart of accounts for a business:
Select one:
a. lists the accounts in the ledger.
b. shows the balance of each account in the general ledger.
c. is a graph.
d. indicates the amount of profit or loss for the period.
The following information relates to a company’s accounts receivable: accounts receivable balance at the beginning of...
The following information relates to a company’s accounts
receivable: accounts receivable balance at the beginning of the
year, $410,000; allowance for uncollectible accounts at the
beginning of the year, $30,000 (credit balance); credit sales
during the year, $1,500,000; accounts receivable written off during
the year, $21,000; cash collections from customers, $1,400,000.
Assuming the company estimates that future bad debts will equal 8%
of the year-end balance in accounts receivable. 1. Calculate the
year-end balance in the allowance for uncollectible accounts....
What is accounts receivable? What is notes receivable and how are they different than accounts receivable?...
What is accounts receivable? What is notes receivable and how
are they different than accounts receivable? How do creditors
decide to extend credit to their customers? What processes do
credit managers use to evaluate new customers? Now explain the
allowance for doubtful accounts and provide examples.
what kinds of information does the accounts receivable turnover ratio provide? Explain in 100-150 words.
what kinds of information does the accounts receivable turnover
ratio provide? Explain in 100-150 words.
On September 1, the balance of the Accounts Receivable control account in the general ledger of...
On September 1, the balance of the Accounts Receivable control
account in the general ledger of Montgomery Company was
$10,600.
The beginning balances are posted to each subsidiary account
below
From the sales journal, transactions are: Sales to Sogard $740,
to Hurley $1,160, to Giambi $1,350, and to Fowler $1,240.
From the cash receipts journal, transactions are: Cash received
from Fowler $1,290, from Sogard $2,320, from Giambi $280, from
Andino $1,630, and from Hurley $1,100
From the general journal, transactions...
On September 1, the balance of the Accounts Receivable control account in the general ledger of...
On September 1, the balance of the Accounts Receivable control
account in the general ledger of Montgomery Company was $10,960.
The customers’ subsidiary ledger contained account balances as
follows: Hurley $1,440, Andino $2,640, Fowler $2,060, and Sogard
$4,820. At the end of September, the various journals contained the
following information.
Sales journal:
Sales to Sogard $800, to Hurley $1,260, to Giambi $1,330, and
to Fowler $1,600.
Cash receipts journal:
Cash received from Fowler $1,310, from Sogard $3,300, from
Giambi $380,...
On September 1, the balance of the Accounts Receivable control account in the general ledger of...
On September 1, the balance of the Accounts Receivable control
account in the general ledger of Montgomery Company was $10,520.
The customers’ subsidiary ledger contained account balances as
follows: Hurley $1,450, Andino $2,290, Fowler $2,080, and Sogard
$4,700. At the end of September, the various journals contained the
following information. Sales journal: Sales to Sogard $750, to
Hurley $1,100, to Giambi $1,360, and to Fowler $1,120. Cash
receipts journal: Cash received from Fowler $1,370, from Sogard
$2,130, from Giambi $330,...
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