Trade receivables and trade payables ledger accounts

Question 1

Name the ledger where the trade receivables ledger accounts are kept.

Answer 1

Sales Ledger

Question 2

Name the ledger where the trade payables ledger accounts are kept.

Answer 2

Purchases Ledger

Question 3

Explain the purpose of using subsidiary ledgers.

Answer 3

It helps to reduce the number of ledger accounts recorded in the General Ledger.

Question 4

Define trade receivables.

Answer 4

· Refers to the amount owed by customers whom the business sell goods or provide services to.
· Shown as a current asset in the Balance Sheet.

Question 5

Define trade payables.

Answer 5

· Refers to the amount owed by the business to its creditors.
· Shown as a current liability in the Balance Sheet.