Advanced Financial Accounting: Ledgers and Documentation

1. Which subsidiary ledger contains only accounts for vendors from whom items are purchased or bought on account?

General Ledger

Accounts Payable Ledger

Inventory Ledger

Accounts Receivable Ledger

The correct answer is the Accounts Payable Ledger, which contains the accounts of vendors who have provided goods or services on credit to the company. The Accounts Receivable Ledger contains accounts of customers who owe money to the company, the General Ledger is the primary accounting record that contains all the company's accounts, and the Inventory Ledger tracks the quantity and value of goods held for resale.

Explanation

The correct answer is the Accounts Payable Ledger, which contains the accounts of vendors who have provided goods or services on credit to the company. The Accounts Receivable Ledger contains accounts of customers who owe money to the company, the General Ledger is the primary accounting record that contains all the company's accounts, and the Inventory Ledger tracks the quantity and value of goods held for resale.

2. What is a subsidiary ledger containing only accounts for charge customers?

Accounts Payable Ledger

General Ledger

Inventory Ledger

Accounts Receivable Ledger

A subsidiary ledger containing only accounts for charge customers is specifically focused on tracking amounts owed by customers for goods or services provided on credit, making the correct answer 'Accounts Receivable Ledger'. The other options provided refer to different types of ledgers used for various accounting purposes unrelated to accounts receivable.

Explanation

A subsidiary ledger containing only accounts for charge customers is specifically focused on tracking amounts owed by customers for goods or services provided on credit, making the correct answer 'Accounts Receivable Ledger'. The other options provided refer to different types of ledgers used for various accounting purposes unrelated to accounts receivable.

3. What is the term for an account in a general ledger that summarizes all accounts in a subsidiary ledger?

Master Account

Controlling Account

Consolidated Account

Primary Account

A controlling account is used to summarize all accounts in a subsidiary ledger and is an essential part of the accounting system. The other terms, Master Account, Consolidated Account, and Primary Account do not specifically refer to this type of account in a general ledger.

Explanation

A controlling account is used to summarize all accounts in a subsidiary ledger and is an essential part of the accounting system. The other terms, Master Account, Consolidated Account, and Primary Account do not specifically refer to this type of account in a general ledger.

4. What is a document that contains a listing of vendor accounts, account balances, and total amounts due to all vendors?

Statement of Cash Flows

Schedule of Accounts Payable

Income Statement

Accounts Receivable Ledger

The Schedule of Accounts Payable provides a detailed list of all vendor accounts, their balances, and the total amounts due to all vendors, aiding in the management of payables. The Accounts Receivable Ledger tracks money owed to the company, the Income Statement shows revenues and expenses over a period, and the Statement of Cash Flows details the movement of cash in and out of the business.

Explanation

The Schedule of Accounts Payable provides a detailed list of all vendor accounts, their balances, and the total amounts due to all vendors, aiding in the management of payables. The Accounts Receivable Ledger tracks money owed to the company, the Income Statement shows revenues and expenses over a period, and the Statement of Cash Flows details the movement of cash in and out of the business.