Trade receivables and trade payables ledger accounts Flashcards Preview

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Flashcards in Trade receivables and trade payables ledger accounts Deck (5)
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1
Q

Name the ledger where the trade receivables ledger accounts are kept.

A

Sales Ledger

2
Q

Name the ledger where the trade payables ledger accounts are kept.

A

Purchases Ledger

3
Q

Explain the purpose of using subsidiary ledgers.

A

It helps to reduce the number of ledger accounts recorded in the General Ledger.

4
Q

Define trade receivables.

A

· Refers to the amount owed by customers whom the business sell goods or provide services to.
· Shown as a current asset in the Balance Sheet.

5
Q

Define trade payables.

A

· Refers to the amount owed by the business to its creditors.
· Shown as a current liability in the Balance Sheet.