Multiple Choice
Which of the following is NOT a situation in which you would record a vendor credit?
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7. Receivables and Investments
Types of Receivables
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In which of the following ledgers must an outstanding patient balance be recorded?
A
General Ledger
B
Accounts Receivable Ledger
C
Accounts Payable Ledger
D
Inventory Ledger
Verified step by step guidance1
Understand the purpose of each ledger mentioned in the problem: The General Ledger is the main accounting record summarizing all financial transactions. The Accounts Receivable Ledger tracks amounts owed to the business by customers. The Accounts Payable Ledger tracks amounts the business owes to suppliers. The Inventory Ledger tracks the value and quantity of inventory.
Identify the nature of the transaction: An outstanding patient balance refers to money owed by a patient to the business, which is a receivable.
Determine which ledger is appropriate for recording receivables: Since the outstanding patient balance represents money owed to the business, it should be recorded in the Accounts Receivable Ledger.
Eliminate incorrect options: The General Ledger is too broad for tracking individual patient balances. The Accounts Payable Ledger is for amounts owed by the business, not owed to the business. The Inventory Ledger is unrelated to receivables.
Conclude that the correct ledger for recording an outstanding patient balance is the Accounts Receivable Ledger.
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