html5-img
1 / 8

Chapter 8

Chapter 8. The Subsidiary Ledger System. Three Ledger System. As a business grows so do the number of credit customers (debtors) and suppliers (creditors) General Ledger may have too many accounts to track Create “subsidiary ledgers” A/R sub ledger A/P sub ledger. A/R Sub ledger.

darice
Download Presentation

Chapter 8

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Chapter 8 The Subsidiary Ledger System

  2. Three Ledger System • As a business grows so do the number of credit customers (debtors) and suppliers (creditors) • General Ledger may have too many accounts to track • Create “subsidiary ledgers” • A/R sub ledger • A/P sub ledger

  3. A/R Sub ledger • Contains all credit customers • Each has an account, e.g. A/R – Hocking Duties of A/R Clerk • Process sales invoices • Record sales invoices • Process cash received from customers • Prepare a schedule of accounts receivable

  4. 300 150 570 Must equal the A/R control account in the general ledger A/R Sub ledger J. Rain N. Furtado D. Woo V. Singh 30050 500570 500 200 400 350 50

  5. A/P sub ledger • Same as A/R but for amounts owed to suppliers • Each supplier has an account in A/P sub ledger Duties of the A/P clerk • Process purchase invoices • Record purchase invoices • Pay creditors • Update creditors accounts • Prepare a schedule of accounts payable

  6. Duties of Accounting Supervisor • Maintain general journal and ledger • Journalize and post to A/R and A/P “control” accounts • Compare control accounts to A/R and A/P schedules • Concerned with • Sales, profits, expenses • Expansion, processes, employee efficiency, etc.

  7. Advantages of sub ledgers • Division of labour • Specialize and become efficient • Helps deal with large volume of transactions • Accounting control • Checks accuracy of records • Less fraud

  8. 110 Posting • Direct: • Source documents to general journal and general ledger • A/R and A/P accounts posted directly • Indirect: • All source documents to general journal first • All posted to general ledger • All posted to sub ledgers • Pr column of journal indicating posting to general and sub ledger:

More Related