The Use of an Accounts Payable Controlling Account

question 73

Multiple Choice

The use of an Accounts Payable controlling account:

• A) Reduces the number of accounts in the subsidiary ledger.
• B) Reduces the total number of accounts maintained.
• C) Reduces the number of entries in the general journals.
• D) Reduces the number of accounts in the general ledger.
• E) Increases the number of columns in the journals.

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Definitions:

Business Risk

The possibility a company will have lower than anticipated profits or experience a loss rather than taking a profit.

Financial Characteristics

The key attributes and figures that define the financial health and performance of a business or investment.

Debt

Debt represents money borrowed and to be repaid, typically with interest, by individuals or entities such as corporations and governmental bodies.

Debt Financing

A method of raising capital whereby a company borrows money through issuing bonds or taking out loans, to be repaid over time with interest.