The accounts receivable subsidiary ledger is essential to most businesses

The accounts receivable subsidiary ledger is essential to most businesses

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The accounts receivable subsidiary ledger is essential to most businesses. Companies may have  hundreds or even thousands of customers who purchase items on credit, who make one or more  payments for those items, and who sometimes return items or purchase additional items before they  finish paying for prior purchases. Recording all credit purchases, returns, and subsequent payments  in a single account would make an individual customer's balance virtually impossible to calculate  because the customer's transactions would be interspersed among thousands of other transactions.  But the accounts receivable subsidiary ledger provides quick access to each customer's balance and 
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Unformatted text preview: account activity. Companies create subsidiary ledgers whenever they need to monitor the individual components of a controlling general ledger account. In addition to the accounts receivable subsidiary ledger, companies often use an accounts payable subsidiary ledger (creditors' subsidiary ledger), which has separate accounts for each creditor, an inventory subsidiary ledger, which has separate accounts for each product, and a property, plant, and equipment subsidiary ledger, which has separate accounts for each long-lived asset....
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