Week 4 Checkpoint - information from the General ledger...

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What are the advantages of the four different special journals? When would you use each type? Most business use special journals as a way to record similar types of transactions outside of the General ledger. By placing all the same types of transactions together, they are easier to track. Each journal should be used on a daily basis to record that days events. What is a subsidiary ledger and what purpose does it serve? A subsidiary ledger is a separate ledger within the General ledger set apart to record the transactions of a single customer or creditor. If a company has many customers and creditors all having each transaction posted to the General ledger, it would clutter the general ledger with an excessive amount of data. In addition to the excessive data, it would be virtually impossible to know the amount owed by a customer or to a creditor at any given moment. It would require too much time and effort to determine this
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Unformatted text preview: information from the General ledger. What is a control account and what purpose does it serve? A control account is a General ledger account that summarizes the subsidiary ledger data. Which two general ledger accounts may act as control accounts for a subsidiary ledger? The account receivable and the accounts payable. What are the advantages of using subsidiary ledgers? By using subsidiary ledgers, you can have up to date information on the specific account balances of transactions a single creditor or customer. A subsidiary ledger also makes it easier to locate possible errors in an account because there are fewer accounts to have to go through. Another reason that subsidiary ledgers are beneficial is that they keep the general ledger free of excessive details. Making it easier to decipher. One person can be making posts to the General ledger at the same time as someone is posting to a subsidiary ledger....
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