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.

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Definitions:

Source of Cash Flow

Source of Cash Flow refers to the origins of the money coming into a business, indicating how the company is earning its income.

Net Operating Loss

A financial situation where a company's allowable tax deductions are greater than its taxable income, leading to a negative taxable income.

Carryback

Carryback involves applying tax deductions or credits to a prior tax year, resulting in a tax refund or reduced tax liability.

Carry Forward

A provision that allows individuals or businesses to apply current year losses, credits, or deductions to future tax years, to reduce taxable income.