Control Accounts And Subsidiary Ledgers Flashcards
What is the first part of recording a transaction when it’s simplified?
The first part is the books of prime entry
What is the second part of recording a transaction when it’s simplified?
Transferring the amounts from the books of prime entry into the ledger accounts within the general ledger where the double entry takes place
What is the third part of recording a transaction when it’s simplified?
The subsidiary ledgers.. individual receivable and payable accounts known as the receivables ledger and the payables ledger
What will form the basis of accounting entries?
Invoices, credit notes, receipts and payments
Define the general ledger?
Contains all the ledger accounts for recording transactions occurring within an entity
What is the general ledger?
Where the double entry takes place in the appropriate ledger accounts.
What are two more ledger accounts?
The receivables and the payables accounts.
When credit sales are posted to receivables and credit purchases to payables, how is this balanced off?
See how much is owed to us by our customers and owed by our suppliers in total
How can we see how many is owed by individual receivables and payables?
Another set of ledger accounts, a subsidiary ledger,which records the amounts owed
What do the receivables account in the general ledger get referred to?
As the receivables ledger control account
Define receivables ledger control account
Shows the total amount due to us from our credit customers… may sometimes be referred to as payables ledger control account
Define payables ledger control account
Contains the total value of all the invoices and credit notes received and cash payments made to credit suppliers for a given period. Sometimes referred to as purchase ledger control account
Define subsidiary ledger
Provided details behind the entries in the general ledger… subsidiary ledgers are maintained for individual receivables and payables
What can subsidiary ledgers be known as
Memorandum ledger
Do subsidiary require double entry system
No
Define subsidiary receivables ledger
More commonly referred to a receivables ledger… it is a set of accounts for individual receivables
Define subsidiary payables ledger
More commonly known as the payables ledger…set of accounts for individual payables
How do we keep track of information from the receivables?
Receivables ledger, this contains a separate ledger account for each individual receivables…same for the payables ledger
