Question

A credit sale of $5,275 to a customer would result in which of the following?

• A debit to the Accounts Receivable account in the general ledger and a debit to the customer's account in the accounts receivable subsidiary ledger.

• A credit to the Accounts Receivable account in the general ledger and a credit to the customer's account in the accounts receivable subsidiary ledger.

• A debit to the Accounts Receivable account in the general ledger and a credit to the customer's account in the accounts receivable subsidiary ledger.

• A credit to the Accounts Receivable account in the general ledger and a debit to the customer's account in the accounts receivable subsidiary ledger.

Answer 1

Solution:

Correct Option is "A debit to the Accounts Receivable account in the general ledger and a debit to the customer's account in the accounts receivable subsidiary ledger"

Reason: This is because as the accounts receivable subsidiary ledger will contain an account for each individual customers. It provides detailed information about date, credit memorandum, discounts, sales returns and allowances & payment made to customers. So, it an explanation to accounts receivable general ledger. Therefore, credit sales is debited both in Accounts receivable general ledger and subsidiary ledger.