Philip Company Uses Special Journals to Record Transactions

question 71

Essay

Philip Company uses special journals to record transactions. Below are the sales journal and cash receipts journal for Philip. Prepare the following:
a. Open an accounts receivable subsidiary ledger having a T-account for each customer. Post the invoices to the subsidiary ledger.
b. Open an Accounts Receivable controlling T-Account. Post the end-of the month totals that affect the Accounts Receivable account only.
c. Prepare a schedule of accounts receivable and prove that its total equals the Accounts Receivable controlling account balance.

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Definitions:

Payroll Account

An account used by a business to process and manage payments to employees, including salaries, wages, and deductions.

Total Compensation

The complete reward package offered to an employee, including salary, bonuses, benefits, and any other financial or non-financial perks.

Current Liabilities

Financial obligations that a company is required to pay within a year, including accounts payable, short-term loans, and other short-term debts.

Past Transactions

Previous financial activities or exchanges that have occurred in an entity's history.