Which of the following is TRUE of an accounts receivable subsidiary ledger?
A) It does not include a receivable account for each customer, but includes a cumulative account for all customers.
B) It contains information about the amount each customer purchased on credit, but excludes the customer name.
C) The total of the accounts in the accounts receivable subsidiary ledger must equal the accounts receivable balance in the general ledger.
D) Companies keep an accounts payable subsidiary ledger that is entirely different from the accounts receivable subsidiary ledger.

Question

Quizplus · Accepted Answer

The purpose of an accounts receivable subsidiary ledger is to record the individual amounts owed by each customer. The total of the accounts in the subsidiary ledger must equal the accounts receivable balance in the general ledger as the subsidiary ledger is a supporting schedule to the accounts receivable account in the general ledger. Therefore, option C is the correct answer. Option A and B are incorrect as they are not true of an accounts receivable subsidiary ledger. Option D is also incorrect as companies typically keep an accounts payable subsidiary ledger that is similar to the accounts receivable subsidiary ledger.

Which of the Following Is TRUE of an Accounts Receivable