Most companies that sell on account record the collection of an accounts receivable in

Question

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When a company collects an accounts receivable, they record it in both the subsidiary ledger (which tracks individual customer accounts receivable balances) and the general ledger (which tracks the overall financial transactions of the company). This ensures that both the specific customer's account and the company's overall financial status are updated accurately. Option B is incorrect because only recording in the general ledger would not provide specific information about which customer's account was paid. Option C is incorrect because only recording in the subsidiary ledger would not update the company's overall financial status. Option D is incorrect because even if collections are deposited in the bank, they still need to be recorded in the company's accounting records for accurate financial reporting.

Most Companies That Sell on Account Record the Collection of an Accounts