Which of the Following Is True of an Accounts Receivable

question 48

Multiple Choice

Which of the following is true of an accounts receivable subsidiary ledger?

• A)It does not include a receivable account for each customer,but includes a cumulative account for all customers.
• B)It contains information about the amount each customer purchased on credit,but excludes the customer name.
• C)The total of the accounts in the accounts receivable subsidiary ledger must equal the accounts receivable balance in the general ledger.
• D)Companies keep an accounts payable subsidiary ledger that is entirely different from the accounts receivable subsidiary ledger.

---

Definitions:

Overhead Allocation Rates

The rates used to apply manufacturing overhead to products or job orders based on a relevant activity base.

Activity-based Costing

A costing method that assigns overhead and indirect costs to specific products or projects, based on the activities that drive costs.

Overhead Costs

Expenses associated with running a business that are not directly tied to a specific product or service.

Cost Pools

Groupings of individual costs in an accounting system, from which cost allocations are made later.