The Presence of a Subsidiary Ledger Requires the Presence of a Summarizing

question 101

True/False

The presence of a subsidiary ledger requires the presence of a summarizing control account in the general ledger.

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Definitions:

Gross Method

An accounting method for recording purchases at the full invoice price without deducting any cash discounts offered.

Sales Discounts

Reductions in the sale price given by a seller to a buyer, often used as an incentive for early payment or bulk purchasing.

Receivable

Amounts of money owed to a company by its customers or other parties for goods or services provided.

Periodic Inventory System

An inventory system that updates inventory records at specific intervals, requiring physical counts to determine cost of goods sold.