Multiple Choice
A taxpayer who receives a Schedule K-1 (Form 1041) typically:
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7. Receivables and Investments
Types of Receivables
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Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
In accounting for types of receivables, individual expenses are accumulated in separate:
A
control accounts
B
trial balances
C
subsidiary accounts
D
general ledgers
Verified step by step guidance1
Understand the concept of receivables: Receivables represent amounts owed to a company by customers or other parties. These are typically recorded in the accounting system to track and manage payments.
Learn about subsidiary accounts: Subsidiary accounts are detailed accounts that provide specific information about individual transactions or balances. They are used to track individual expenses or receivables separately for better organization and reporting.
Recognize the relationship between subsidiary accounts and control accounts: Subsidiary accounts are linked to control accounts, which summarize the total balances of all subsidiary accounts. For example, the Accounts Receivable control account reflects the total of all individual customer receivable balances recorded in subsidiary accounts.
Understand why subsidiary accounts are used for individual expenses: Subsidiary accounts allow businesses to track specific details for each customer, vendor, or transaction. This helps in reconciling accounts, identifying discrepancies, and ensuring accurate financial reporting.
Review the accounting structure: Subsidiary accounts are part of the general ledger system but are not the same as control accounts, trial balances, or general ledgers. They provide detailed information that supports the summary data in control accounts.
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