5 Questions
Which accounting departments typically keep subsidiary ledgers?
Inventory, Accounts Payable, Payroll, Accounts Receivable
What is the purpose of separating subsidiary ledgers in different accounting departments?
To verify the overall accuracy of accounting data
What should the total of account balances in a subsidiary ledger equal to?
The total of account balances in the corresponding general ledger control account
What is the purpose of periodically reconciling summary balances from subsidiary accounts, journals, and control accounts?
To assess the completeness and accuracy of transaction processing
What will cause an out-of-balance condition that should be detected during the general ledger update?
An event incorrectly recorded in a journal or subsidiary ledger
Study Notes
Accounting Departments and Subsidiary Ledgers
- Accounts receivable, accounts payable, and payroll departments typically keep subsidiary ledgers.
- The purpose of separating subsidiary ledgers in different accounting departments is to facilitate detailed tracking and recording of specific transactions and accounts.
Subsidiary Ledger Balances
- The total of account balances in a subsidiary ledger should equal the corresponding control account balance in the general ledger.
Reconciling Summary Balances
- The purpose of periodically reconciling summary balances from subsidiary accounts, journals, and control accounts is to ensure accuracy and detect errors.
Out-of-Balance Condition
- An out-of-balance condition that should be detected during the general ledger update is typically caused by a mismatch between the total of subsidiary ledger account balances and the corresponding control account balance.
Quiz: Subsidiary Ledgers and General Ledger Control Accounts Test your knowledge on subsidiary ledgers and general ledger control accounts with this quiz. Learn about the importance of keeping separate ledgers for inventory, accounts payable, payroll, and accounts receivable. Understand how the balances in the subsidiary ledgers should match the corresponding general ledger control accounts. Perfect for accounting professionals and students looking to enhance their understanding of this essential concept.
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