Specialty Foods Company Maintains a Separate Accounts Receivable Account for Each

question 211

Multiple Choice

Specialty Foods Company maintains a separate accounts receivable account for each customer.Regarding this accounting treatment,which of the following statements is incorrect?

• A) The separate customer accounts receivable are called subsidiary accounts.
• B) When a customer makes a payment on account, a debit is posted to the accounts receivable subsidiary account as well as to the accounts receivable control account.
• C) The sum of all balances in the subsidiary accounts receivable equals a control account balance.
• D) The purpose of this accounting treatment is to account for payments received from the customer and the amounts still owed.

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