Chapter 12 Review Questions
Subsidiary Ledger
A ledger that summarizes a single general ledger account.
Accounts Receivable Ledger
A list of the company's customers who are allowed to buy on account.
Accounts Payable Ledger
A list of the company's vendors/suppliers whom we buy on account.
Schedule of Accounts Receivable
A listing of customer accounts, account balances, and total amount due from all customers prepared after all entries in a journal are posted.
Schedule of Accounts Payable
A listing of vendor accounts, account balances, and total amount due all vendors prepared after all entries in a journal are posted.
Journal entries are sorted and summarized by transferring information to?
Accounts payable accounts, accounts receivable accounts, and general ledger accounts.
When is a schedule of accounts payable prepared?
After ALL journal entries are posted.
When opening a new page in an accounts receivable ledger for a customer, _______________?
Along with putting in their customer name and number, the BALANCE is written in the Item column as well.
Controlling Account
An account in the General Ledger that summarizes all accounts in a subsidiary ledger. The business has 2 controlling accounts A/R and A/P.
T/F: Accounts payable ledger contains only accounts for for charge customers who we extend credit.
FALSE
T/F: Accounts receivable ledger contains only accounts for vendors from whom we purchase or buy on account.
FALSE
T/F: Entries in a cash receipts journal affect account balances in the accounts payable ledger and the general ledger.
FALSE
T/F: When the balance of a vendor account in an accounts payable ledger is changed, the balance of the controlling account is unaffected or remains the same.
FALSE
The SPECIAL amount columns in the Sales, Purchases, Cash Receipts, and Cash Payments journals are posted as TOTAL amounts to their respective accounts at the end of the month in the ____________ ledger.
GENERAL
Amounts in the GENERAL amount columns of the Cash Payments journals are posted ______________ to their respective accounts in either the General or AP ledgers.
INDIVIDUALLY
A check mark in parentheses below the GENERAL debit column of the cash payments journal indicates that the TOTAL from that column _________?
Is not posted
T/F: Amounts recorded in general amount columns are posted individually to the general ledger account named in the Account Title column.
TRUE
T/F: Items affecting customer or vendor accounts are posted periodically during the month. The best practice is to post daily to the A/R and A/P subsidiary ledgers so account balances will be up-to-date.
TRUE
T/F: Since general ledger account balances are needed only when financial statements are prepared, the general ledger account are posted less often during the month.
TRUE
T/F: When opening a vendor account, it is opened by writing the vendor name and vendor number on the heading of the ledger account.
TRUE
T/F: When using an accounts receivable ledger, the total amount due from all customers is summarized in a single general ledger account.
TRUE
When buying supplies either for the office or store on account, this transaction goes in the general journal. The credit entry in the general journal should read accounts payable/Vendor name. The posting for this transaction goes in 2 different ledgers. The accounts payable part (controlling account) is to the left of the / and is posted in the _______________ and the vendor name or account to the right of the slash is posted into their account in the _____________________.
The general accounts payable part (controlling account) of this entry is to the left of the / AND posted in the GENERAL LEDGER controlling account and the vendor name or account to the right of the / is posted into their account in the ACCOUNTS PAYABLE LEDGER.
How do you mark or identify the journals (Sales, Purchases, CR Journal and CP Journal) after the totals have been posted to the respective general ledger accounts?
You put the respective account numbers in parentheses underneath the total amounts in the journal to identify the posting is complete for those special amount columns.
Amounts recorded in the general amount columns are posted individually to the general ledger account named in the ______________________?
account title column.
When posting from the Purchases Journal, the vendor in the account credited column of the journal is posted individually to their account in the __________?
accounts payable ledger.
When posting from the Sales Journal, the customer in the account debited column of the journal is posted individually to their account in the ___________?
accounts receivable ledger.
The accounts receivable ledger contains only accounts of ________?
charge customers.
The heading of the balance column of an account in the accounts payable ledger is titled __________?
credit balance.
The heading of the balance column of an account in the accounts receivable ledger is titled ____________?
debit balance.
A general ledger sorts and summarizes all information affecting ____________?
income statement and balance sheet accounts.
The SEPARATE amounts in the accounts receivable debit column of a sales journal are ___________?
not posted individually to the general ledger but posted individually to the proper customer account in the accounts receivable ledger.
The accounts receivable credit column total of the cash receipts journal is _____?
posted to the general ledger controlling account at the end of the month.
When a credit is posted to an accounts payable ledger ____?
the previous balance is ADDED to the new amount in the Credit column because AP accounts have a normal credit balance and credits increase the balance.
When a debit is posted to an accounts receivable ledger ____?
the previous balance is ADDED to the new amount in the Debit column because AR accounts have a normal debit balance and debits increase the balance.
DAILY general ledger account balances are _____?
usually not necessary since balances in this ledger are only needed when financial statements are prepared.
