The Use of an Accounts Payable Controlling Account

question 73

Multiple Choice

The use of an Accounts Payable controlling account:

• A) Reduces the number of accounts in the subsidiary ledger.
• B) Reduces the total number of accounts maintained.
• C) Reduces the number of entries in the general journals.
• D) Reduces the number of accounts in the general ledger.
• E) Increases the number of columns in the journals.

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Definitions:

Factory Overhead

All indirect costs related to manufacturing beyond direct materials and direct labor, including utilities, depreciation of factory equipment, and factory rent.

Process Cost System

An accounting method used to track cost related to processes or departments when mass-producing identical or similar products.

Work In Process Inventory

The value of partially completed goods or products that are in the process of being manufactured.

Perpetual Inventory System

The inventory system in which each purchase and sale of merchandise is recorded in the inventory account and related subsidiary ledger; therefore, the inventory records are updated continuously.