The General Ledger Account Representing the Subsidiary Ledger Is Known

question 18

Multiple Choice

The general ledger account representing the subsidiary ledger is known as a control account because:

• A) inclusion of both control accounts and subsidiary ledger accounts in the general ledger improves control.
• B) the accuracy of the detailed accounts in the subsidiary ledger can be checked against the aggregate data and the balance contained in it.
• C) subsidiary ledgers eliminate the need to record totals in the general ledger.
• D) it includes all transactions in the subsidiary ledger.

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Definitions:

Activity-Based Costing

An accounting technique that distributes indirect and overhead costs to distinct activities, offering a more accurate determination of product costs.

Total Cost

Represents the sum of all costs incurred in the production of goods or the provision of services.

Manufacturing Overhead

All indirect costs associated with the manufacturing process, excluding direct materials and direct labor.

Activity-Based Costing

An approach to costing that recognizes activities within an organization and distributes their costs across all products and services according to the real consumption of each.