Markus Company maintains a separate accounts receivable account for each customer.On June 18,Markus sells $6,200 services on account to customer Anthony and $1,600 services on account to customer Walker.How will these two transactions affect the control and subsidiary accounts?
A)The control account,Accounts Receivable,will be increased with a debit of $7,800.
B)The individual customer accounts in the subsidiary ledger will be increased with credits.
C)After posting this sales transaction,the sum of the balances in subsidiary accounts receivable will not equal the control account balance.
D)The control account will have a debit balance and the subsidiary accounts will have a credit balance.This keeps the accounting equation in balance.

Question

Quizplus · Accepted Answer

When Markus Company sells services on account to customers, it increases its Accounts Receivable control account with a debit for the total amount of sales, in this case $7,800. The subsidiary accounts for each customer will also be increased with debits for the amount of sales, not credits as suggested in option B. Option C is incorrect, as the sum of the balances in subsidiary accounts receivable should always equal the balance in the Accounts Receivable control account. Option D is also incorrect, as the control account should have a credit balance after these transactions, not a debit balance.

Markus Company Maintains a Separate Accounts Receivable Account for Each