Appendix D - APPENDIXD SpecialJournalsandSubsidiaryLedgers

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APPENDIX D Special Journals and Subsidiary Ledgers ASSIGNMENT CLASSIFICATION TABLE Study Objectives Questions Brief Exercises Exercises Problems 1. Describe the nature and purpose of a subsidiary ledger. 1, 2, 3, 6, 8, 13 1, 2 1, 2, 3, 6, 8, 9 1, 2, 3, 4, 5, 6 2. Explain how special journals are used in journalizing. 4, 5, 7, 8, 9, 10, 11, 12, 14 3, 4, 6, 7 1, 4, 5, 6, 7 1, 2, 3, 4, 5, 6 3. Indicate how a columnar journal is posted. 9, 13 5 1, 3, 8, 9 1, 2, 3, 4, 5, 6 Appendix D-1
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ASSIGNMENT CHARACTERISTICS TABLE Problem Number Description Difficulty Level Time Allotted (min.) D-1 Journalize transactions in cash receipts journal and post to control account and subsidiary ledger. Simple 30-40 D-2 Journalize transactions in cash payments journal and post to control account and subsidiary ledger. Simple 30-40 D-3 Journalize transactions in multi-column purchases journal and post to the general and subsidiary ledgers. Moderate 40-50 D-4 Journalize transactions in special journals. Moderate 50-60 D-5 Journalize in purchase and cash payments journals, post, prepare a trial balance, prove control to subsid- iary, prepare adjusting entries, and prepare an ad- justed trial balance. Moderate 60-70 D-6 Journalize in special journals, post, and prepare a trial balance. Complex 60-70
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ANSWERS TO QUESTIONS 0 1. A subsidiary ledger is a group of accounts with a common characteristic. The accounts are as- sembled together to facilitate the accounting process by freeing the general ledger from details concerning individual balances. The advantages of using subsidiary ledgers are that they: < Permit transactions affecting a single customer or single creditor to be shown in a single account, thus providing necessary up-to-date information on specific account balances. < Free the general ledger of excessive details relating to accounts receivable and accounts payable. As a result, a trial balance of the general ledger does not contain potentially thou- sands and thousands of individual account balances. < Assist in locating errors in individual accounts by reducing the number of accounts combined in one ledger and by using controlling accounts. < Permit a division of labor in posting by having one employee post to the general ledger and (a) different employee(s) post to the subsidiary ledgers. 0 2. (a) (1) Individual transactions are generally posted daily to the subsidiary ledger. (2) In contrast, postings to the control account are usually made in total at the end of the month. (b) A control account is a general ledger account that summarizes subsidiary ledger data. Sub- sidiary ledger accounts keep track of specific account activity (i.e., specific debtors or credi- tors). A subsidiary ledger is an addition to, and an expansion of, the general ledger. 0 3.
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Appendix D - APPENDIXD SpecialJournalsandSubsidiaryLedgers

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