Subsidiary Ledgers and Special Journals

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A subsidiary journal is a ledger that includes all of the information of a general ledger, and it holds accounts with comparable characteristics. The function is that is can contain things such as balance dues and accounts payable and it can show the amount overall. The advantages of utilizing subsidiary ledgers is that the amount of all the accounts is kept in the General Ledger and all of the details of the accounts are kept in the subsidiary ledger which is separate so you can keep them in different columns so to not get puzzled.

A control account is an account that includes the total variety of sales/purchases made. If you include up all of the individual accounts it must equal the control account, likewise referred to as a summary of the account. The purpose of a control account is that it does not need to contain all of the information but it will have all of the financial info arranged accurately.

The accounts receivable and accounts payable ledgers are two general ledger accounts that act as control accounts for a subsidiary ledger. Cash receipts journal, cash payments journal, sales journal, and the purchase journal are the four different special journals of accounting. The advantages of all the journals are that transactions that occur on a daily basis can be put into a specific journal and one person can be in charge of that journal. All of the information can be tracked in one place which can make the work much easier as well.

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A cash payments journal can be used with any company that deals primarily with cash which is most companies. A cash receipts journal is sometimes used for the sales of a product to help track transactions. Purchase journals are used with companies that make a lot of purchases on one account while sales journals are for companies that perform purchases. The sales journal posts the sum on the general ledger at the end of the pay period/month.

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Subsidiary Ledgers and Special Journals. (2016, Oct 23). Retrieved from

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