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Subsidary Ledgers and Special Journals

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Subsidiary Ledgers and Special Journals

In accounting, every journal has its separate place. There are four special journals in accounting that has special advantage. These journals are sales journal, cash receipts journal, purchases journal, and payments journal. The sales journal secures all transactions that belong to sales for the business. This includes sales of possessions and the service provided by a business. The sales journal produces a thorough image of the history of all sales for the establishment and reveals the activity in a consecutive manner that allows for an easier way to examine the data. The Cash Receipts Journal secures all items that contain a receipt of funds, which includes cash sales for goods and collections of accounts receivables. The sales, Receipts, and Purchases journals decrease the number of items recorded to the General Ledger. The Purchase Journal contains each purchase of goods for an industry. The journal entry debits products or supplies and credits accounts payable for supplier. This journal includes all the debits that are combined for each period for the General Ledger. This allows for the Purchase Journal to act as the sole source of detailed information about purchases. The Cash Payment Journal includes disbursements and also followed by pre-numbered system of checks. This journal also keeps the General Ledger clean and free of untidiness and acts as the only source for the payment made by the company. A Subsidiary Ledger is “a group of accounts with common characteristics” (Weygandt, Kimmel, & Kieso, 2008). This ledger is used to record transactions to the individual accounts payable balances for each of the company’s creditor. A control account is a general ledger account that recaps subsidiary ledger data. Its purpose is to keep the general ledger free of detail information and provide an accurate balance for the financial statements. A Control account has two general ledger accounts that act as control accounts for a subsidiary ledger. Those accounts are accounts receivable subsidiary ledger and accounts payable subsidiary ledger. The advantage of using subsidiary ledger is it provides up to date information on account balances and it shows in a single account transaction affecting a customer or creditor.

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