Hodges Ltd uses a subsidiary ledger and control account system for its accounts receivable. At the end of the accounting period a list of customers' accounts and balances owing is prepared from the subsidiary ledger. The purpose of this customer list is to:
A) determine the amount that should be posted to the accounts receivable control account.
B) establish whether the total debits and total credits in the subsidiary ledger are equal.
C) provide information necessary for the completion of the trial balance.
D) prove that the subsidiary ledger agrees with the control account.

Question

Quizplus · Accepted Answer

The customer list from the subsidiary ledger is used to prove that the balances in the subsidiary ledger agrees with the balance in the accounts receivable control account. This is necessary to ensure the accuracy of the company's financial statements. Choices A, B, and C are not the primary purpose of preparing the customer list.

Hodges Ltd Uses a Subsidiary Ledger and Control Account System