The General Rule for Posting to a Subsidiary Ledger and Its

question 71

Multiple Choice

The general rule for posting to a subsidiary ledger and its controlling account is

• A) The controlling account is debited periodically for an amount or amounts equal to the sum of the debits to the subsidiary ledger
• B) The controlling account is credited periodically for an amount or amounts equal to the sum of the credits to the subsidiary ledger
• C) A trial balance ledger
• D) The controlling account is both debited and credited periodically for an amount or amounts equal to the sum of the debits or credits to the subsidiary ledger
• E) All of these

---

Definitions:

Capital Lease

A lease agreement that is classified as a purchase by the lessee due to its terms closely mirroring the acquisition of an asset.

Preferred Stock

Preferred stock represents a class of ownership in a corporation that has a higher claim on its assets and earnings than common stock, often receiving dividends before common shareholders.

Common Stock

A type of security that represents ownership in a corporation, granting holders voting rights and a share in the company's profits through dividends.

Earnings Per Share

A financial ratio calculated by dividing a company's net profit by the number of its outstanding shares, indicating the profitability on a per-share basis.