Subsidiary_Ledgers_and_Special_Journals

XACC 280 Companies use special journals to group similar types of transactions. There are several different types of special journals that companies use in journalizing. They are sales journals, cash receipts journals, purchase journals, and cash payments journals (Weygandt, Kimmel, & Kieso, 2008). Sales journals are used to record all sales of merchandise on account. Cash receipts journals are used to record all cash received including cash sales. Purchases journals are used to record all purchases of merchandise on account. Cash payments journals journal is used for all cash paid including cash purchases. When transactions cannot be recorded in a special journal, the transactions are recorded in a general journal. These transactions include correcting, adjusting, and closing entries. A subsidiary ledger is a group of accounts with common characteristics. These ledgers get rid of the individual balances from the general ledger. A control account is the general ledger account that summarizes the ledger data. The two general ledger accounts that may act as control accounts for a subsidiary ledger are accounts receivable subsidiary ledgers and accounts payable subsidiary ledgers (Weygandt, Kimmel, & Kieso, 2008). The advantages of using subsidiary ledgers include they provide up-to-date information on specific account balances by showing a single account transaction affecting one customer or one creditor. They free the general ledger of excessive details with the end result being a general ledger that does not contain a large amount of individual account balances. They also help find errors in individual accounts. This is because they reduce the number of accounts in one ledger with the use of control accounts. They also make it possible for more than one employee to record data. For example, one employee can post to the general ledger while another employee posts to the subsidiary ledgers. References Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial accounting (6th ed.). Hoboken, NJ: Wiley.