Preston Ltd uses a subsidiary ledger and control account system for its accounts receivable. At the end of the accounting period a listing of customers' accounts is prepared from the subsidiary ledger. The purpose of this listing is to:

Question

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The listing of customers' accounts from the subsidiary ledger is used to prove that the subsidiary ledger agrees with the control account. This is necessary to ensure that the accounts receivable balances reported in the financial statements are accurate. Options A, B and D are incorrect because the purpose of the listing is not to furnish the amount to be posted to the accounts receivable control account, determine debits vs. credits in the subsidiary ledger, or provide information for trial balance preparation.

Preston Ltd Uses a Subsidiary Ledger and Control Account System