Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

7. Receivables and Investments

Types of Receivables

Financial Accounting

7. Receivables and Investments

Types of Receivables

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Multiple Choice

Which of the following best describes the relationship between the accounts receivable ledger and its controlling account in the general ledger?

The accounts receivable ledger is used only for internal reporting, while the controlling account is used for external reporting.

The total of the accounts receivable ledger should equal the balance of the Accounts Receivable controlling account.

The accounts receivable ledger records only cash sales, while the controlling account records all sales.

The controlling account is a subsidiary ledger that provides details for each customer.

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Verified step by step guidance

Understand the concept of subsidiary ledgers and controlling accounts: A subsidiary ledger provides detailed information about individual accounts, while the controlling account in the general ledger summarizes the total balance of all accounts in the subsidiary ledger.

Focus on the Accounts Receivable ledger: This subsidiary ledger contains detailed records of amounts owed by individual customers, including invoices, payments, and outstanding balances.

Relate the Accounts Receivable ledger to the controlling account: The controlling account in the general ledger, labeled 'Accounts Receivable,' represents the total amount owed by all customers collectively.

Verify the relationship: The total of all individual customer balances in the Accounts Receivable ledger must equal the balance of the Accounts Receivable controlling account in the general ledger. This ensures accuracy and consistency between the subsidiary ledger and the general ledger.

Eliminate incorrect options: The Accounts Receivable ledger is not limited to internal reporting, nor does it record only cash sales. Additionally, the controlling account is not a subsidiary ledger but rather a summary account in the general ledger.