Monday, November 26, 2007

Chapter 12

1.) Explain what a subsidiary ledger is and list the ones that will be using as we post transactions from the journal to the ledgers.

Subsidiary ledger is a ledger that is summarized in a single general ledger account. There are two kinds of subsidiary ledger:

  • Accounts Payable Ledger- a subsidiary ledger that contains only accounts for vendors from whom items are purchased or bought on account.
  • Accounts Receivable Ledger- a subsidiary ledger containing only accounts for charge customers.

2.) Explain what a controlling account is and list the ones that will be used.

  • Controlling Account- an account in a general ledger that summarizes all the accounts in a subsidiary ledger.

3.) Explain where controlling accounts are maintained.

  • It is maintained in a subsidiary ledger.

4.) What is the relationship between a controlling account and a subsidiary ledger?

  • The controlling account is part of the subsidiary ledger.

5.) Identify in writing the two schedules that will be prepare.

  • Schedule of Accounts Payable- a listing of vendor accounts, account balances, and total amount due from all vendors.
  • Schedule of Accounts Receivable- a listing of customers accounts, account balances, and amount due from all customers.

6.) List the rules for posting a journal's column totals.

  • Write the date in the Date column of the account.
  • Write the journal page number in the Post. Ref. column of the account.
  • Write Cash Credit column total in the account's Credit column.
  • Subtract the amount in the Credit column from the previous balance in the Balance Debit column. Write the new account balance in the Balance Debit column.
  • Return to the journal and write the general ledger account number in parentheses bellow the Cash Credit column total.

7.) Explain why the 3-column account form used in an accounts receivable ledger has a Debit Balance column?

  • Accounts receivable are assets, and assets have a normal debit balance. Therefore, the form used in the accounts receivable ledger has Debit Balance column.

8.) What is the title of the balance amount column of the accounts payable ledger form and why is that used?

  • Accounts Payable is a liability and it has a normal credit balance and as a result the Debit Balance column is not needed.

9.) List the steps for starting a new page in the accounts payable ledger

  • Write the vendor name on the Vendor line
  • Write the vendor number on the Vendor No. line
  • Write the date in the Date column
  • Write the word Balance in the Item column
  • Place a check mark in the Post. Ref. column to show that the amount has been carried forward from a previous page rather than posted from a journal
  • Write the account balance in the Credit Balance column

10.) List the steps for posting to the accounts receivable ledger.

  • Write the date in the Date column of the account
  • Write the journal page number in the Post. Ref. column of the account
  • Write the debit amount in the Debit column of the account
  • Add the about in the Debit column to the previous balance in the Debit Balance column
  • Write the new account balance in the Debit Balance column
  • Write the customer number in the Post. Ref. column

4 comments:

SBL BPO said...

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MrGold said...
This comment has been removed by the author.
MrGold said...

To find out more on controlling accounts and subsidiary ledgers and what is their relationship, this link might help: http://www.webanswers.com/business/what-are-controlling-accounts-and-subsidary-ledgers-what-is-their-realationship-11c0fc

Remya said...

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Thanks....
Regards,
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