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Calculate the opening balance for capital and enter all the opening balances into general ledgerSubsidiary Ledgers are not in useso control accounts are not used for accounts payable or receivable?
Wiki User
∙ 13y ago
Normally the capital amount shows in credit site in opening balance. it's means that the last year capital amount of balance sheet. and when we enter the capital amount in ledger, we have to show credit site.
Wiki User
∙ 13y ago
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Why may a control account carries both debit and credit balances?
A control account summarizes a set of subsidiary accounts. For example, Accounts receivable may have a control account, representing total Accounts receivable, and also may have a set of subsidiary accounts, representing the amount of Accounts receivable owed by each customer/debtor. The total of all subsidiary accounts must equal the balance of the control account. Control accounts will have debit or credit balances depending on the nature of those accounts. Control accounts for assets, such as Accounts receivable or Fixed assets, will have native debit balances. Control accounts for liabilities, such as Accounts payable, will have native credit balances.
How do you verify balances on the trial balance?
verify the balances of all ledger accounts
What is the difference of sales and accounts receivable called?
I'm not exactly sure of the question, but I'm going to assume you mean what is the difference in the balances of sales and account receivable. First lets look at sales, sales (aka revenue) is what a company makes from providing a good or service. Say you sale $1,000 in watches and the buyer wants to put $500 of that on account (credit) for you that is an account receivable. The difference ($500) is recorded as "cash". If however your question is referring to the accounts themselves, there is no "term" to refer to the difference as the accounts are entirely different themselves and on opposite ends of the accounting equation. Sales (aka revenue) is an Equity account and maintains a credit balance, while accounts receivable is an asset account and maintains a debit balance. Basic transactions for sales and accounts receivable are: You sold $1,000 in watches, the buy pays $500 in cash and places the remaining $500 on credit the journal entry for this transaction is as follows: Cash (debit) $500 Account Receivable (debit) $500 Sales (credit) $1,000
Why do expense accounts have debit balances?
20333
Why is it important to maintain individual account receivable balances?
Individual account receivable balances show each person (or company's) balance owed to the company. You must keep all individual account receivable balances accurate in order to know who owes what to you. For example you general AR balance shows you are owed $5,000, this doesn't show you "who" owes you that amount or how much each person owes. Say John Doe owes you $1500 and Suzie Q owes you $2,000 that accounts for $3,500 of the AR you are owed, but doesn't account for the remaining balance of $1500. Without proper individual AR accounts you wouldn't have a record of who owes what and could either end up trying to over charge someone or losing money if you don't know how owes you so that you can invoice them for the correct amount.
Why may a control account carries both debit and credit balances?
A control account summarizes a set of subsidiary accounts. For example, Accounts receivable may have a control account, representing total Accounts receivable, and also may have a set of subsidiary accounts, representing the amount of Accounts receivable owed by each customer/debtor. The total of all subsidiary accounts must equal the balance of the control account. Control accounts will have debit or credit balances depending on the nature of those accounts. Control accounts for assets, such as Accounts receivable or Fixed assets, will have native debit balances. Control accounts for liabilities, such as Accounts payable, will have native credit balances.
What is guest ledger?
A subsidiary ledger related to the accounts receivable general ledger account used by hotels to record the individual account activity of guests who are still at the hotel. The total of the balances in the city ledger plus the total of the balances in the guest ledger should equal the balance in the accounts receivable general ledger account.
What does ARO stands for?
ARO stands for After Receipt of Order.
Why are control account balances reported in external financial statements while subsidiary account balances are not?
A control account is a summary account in the general ledger. The details that support the balance in the summary account are contained in a subsidiary ledger-a ledger outside of the general ledger. The purpose of the control account is to keep the general ledger free of details, yet have the correct balance for the financial statements. For example, the Accounts Receivable account in the general ledger could be a control account. If it were a control account, the company would merely update the account with a few amounts, such as total collections for the day, total sales on account for the day, total returns and allowances for the day, etc. The details on each customer and each transaction would not be recorded in the Accounts Receivable control account in the general ledger. Rather, these details of the accounts receivable activity will be in the Accounts Receivable Subsidiary Ledger. This works well because the employees working with the general ledger probably do not need to see the details for every sale or every collection transaction. However, the sales manager and the credit manager will need to know detailed information on individual customers, including whether a customer recently reduced their account balance. The company can provide these individuals with access to the Accounts Receivable Subsidiary Ledger and can keep the general ledger free of a tremendous amount of detail. Sourced: http://blog.accountingcoach.com/accounts-receivable-control-account-subsidiary-ledger/ (second result after googling "Control account balances and Subsidiary account balances" ps: lrn2google)
How do you verify balances on the trial balance?
verify the balances of all ledger accounts
What is the difference of sales and accounts receivable called?
I'm not exactly sure of the question, but I'm going to assume you mean what is the difference in the balances of sales and account receivable. First lets look at sales, sales (aka revenue) is what a company makes from providing a good or service. Say you sale $1,000 in watches and the buyer wants to put $500 of that on account (credit) for you that is an account receivable. The difference ($500) is recorded as "cash". If however your question is referring to the accounts themselves, there is no "term" to refer to the difference as the accounts are entirely different themselves and on opposite ends of the accounting equation. Sales (aka revenue) is an Equity account and maintains a credit balance, while accounts receivable is an asset account and maintains a debit balance. Basic transactions for sales and accounts receivable are: You sold $1,000 in watches, the buy pays $500 in cash and places the remaining $500 on credit the journal entry for this transaction is as follows: Cash (debit) $500 Account Receivable (debit) $500 Sales (credit) $1,000
Why is an accounts receivable aging report needed for an audit?
Auditors perform a variety of critical procedures with this report. The A/R aging report is needed by auditors to verify that the balances on the subsidiary ledger agree with the General Ledger at a given point in time. Auditors are required to confirm a selection of customer account balances directly with the customers. It is also used to assess the adequacy of the Company's provision for bad debts. Toward the end of the audit, auditors may attempt to verify that certain accounts receivable have been collected, or if not collected, the auditor may perform other procedures for assurance that the accounts are collectible. Auditors verify that any accounts receivable from related-parties are identified and properly disclosed. Auditors will also perform an array of analytical procedures on the report, and may perform additional procedures based on the results of that testing.
Why do expense accounts have debit balances?
20333
What report lists accounts and their balances in which the total debit balances should equal the total credit balances?
Trial Balance
Why is it important to maintain individual account receivable balances?
Individual account receivable balances show each person (or company's) balance owed to the company. You must keep all individual account receivable balances accurate in order to know who owes what to you. For example you general AR balance shows you are owed $5,000, this doesn't show you "who" owes you that amount or how much each person owes. Say John Doe owes you $1500 and Suzie Q owes you $2,000 that accounts for $3,500 of the AR you are owed, but doesn't account for the remaining balance of $1500. Without proper individual AR accounts you wouldn't have a record of who owes what and could either end up trying to over charge someone or losing money if you don't know how owes you so that you can invoice them for the correct amount.
What is the purpose of closing entries?
The purpose of closing entries is to transfer the balances of temporary accounts to permanent accounts. These entries are used via the adjusted trial balances.
WHAT is normal balance of accounts payable?
credit balances
