Companies may have thousands of customers and thousands of accounts receivable. How do companies use subsidiary accounts to manage their accounts receivable?

Question

Quizplus · Accepted Answer

To record individual customer receivable and payable transactions, postings are made to a subsidiary account or ledger. Summary postings for the total of the amounts affecting the accounts receivable and accounts payable accounts are made to those accounts in the general ledger. The accounts receivable and accounts payable accounts maintained in the general ledger are referred to as control accounts. The totals of the control accounts must be equal at all times to the total of the individual accounts kept in the subsidiary ledgers.

Companies May Have Thousands of Customers and Thousands of Accounts