Topic 3: Accounting Information Systems

Question 1

What is a Subsidiary Ledger?

Answer 1

It’s a Sub Account to a General Ledger Control account. For example, Accounts Receivable Subsidiary Ledgers could be Customer A and Customer B. This records credit sales with specific customers. These then total together and are placed in the General Ledger Accounts Receivable (Control Account).

Question 2

What is a Control Account?

Answer 2

It is a General Ledger with the total of all of it’s Subsidiary Ledger accounts. For example, Accounts Receivable Subsidiary Ledgers for Customer A and Customer B would get added together and placed in the Accounts Receivable Control Account.

Question 3

How much is GST in Australia?

Answer 3

10%. Note that GST is dealt with at the time of the original transaction. For example, if a business purchases an item on credit, GST is accounted for in that purchase and not when paid for at a later date.

Question 4

What is a Special Journal?

Answer 4

A Special Journal is designed to record one category of transaction. The General Journal is then used only for all the other transactions.

Question 5

What are the most common types of Special Journals?

Answer 5

1. Sales Journal for Credit Sales
2. Cash Receipts Journal for Receipts of Cash
3. Purchases Journal for Credit Purchases
4. Cash Payments Journal for Payments of Cash

Question 6

What does the Sales Journal record?

Answer 6

ALL Credit Sales.

Question 7

What does the Purchases Journal record?

Answer 7

ALL Credit Purchases.

Question 8

What does the Cash Receipts Journal record?

Answer 8

ALL the transactions involving the Receipt of Cash.

Question 9

What does the Cash Payments Journal record?

Answer 9

Transactions involving the payment of cash.

Question 10

What are the two Subsidiary Ledgers that we deal with?

Answer 10

Accounts Receivable Subsidiary Ledger
Accounts Payable Subsidiary Ledger