Jessica E Perez
There are four different special journals in the accounting department, which includes sales, cash receipts, purchases, and cash payments journal. These financial transactions are information giving as advantages to any financial transaction of a company. The sales journal saves time with the one line entry for each sale done which reduces the errors. A person would have to use this when he or she does a credit sale. The cash receipts journal provides daily and weekly information about cash balances. A person would have to use this when he or she sells merchandise for cash. The purchases of journal are used for a single type of frequently recurring transactions. An accountant uses this transaction when a purchase is made. The cash payments journal is use for all payments that have been made from a company’s bank account. An accountant uses this transaction when a company makes a payment from its account.
A subsidiary ledger is a group of accounts with a common characteristic. Its purpose is to free the general ledger from the details of every transaction or balances. It is an addition to, and an expansion of, the general ledger.
A control account is a general ledger account that summarizes subsidiary ledger data. Its purpose is to keep the general ledger free of details, yet have the correct balance for the financial statements.
The two general ledger accounts act as control accounts for a subsidiary ledger includes accounts receivable subsidiary ledger and accounts payable subsidiary ledger. The accounts receivable subsidiary ledger collects transaction data of individual customers. The accounts payable subsidiary ledger collects transaction data of individual creditors.
The advantages of using subsidiary ledgers includes that they show in a single account transactions affecting one customer or one creditor also providing up-to-date information on... [continues]
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