Question

Subsidiary ledgers commonly include an inventory subsidiary ledger and a property, plant, and equipment subsidiary ledger. Are used to reduce the size of the general ledger. Are updated at the end of the accounting period based on the information contained in the control account. All of the choices are correct regarding subsidiary ledgers?

1) Commonly include an inventory subsidiary ledger and a property, plant, and equipment subsidiary ledger.
2) Are used to reduce the size of the general ledger.
3) Are updated at the end of the accounting period based on the information contained in the control account.
4) All of the choices are correct regarding subsidiary ledgers.

Answer 1

All of the choices provided about subsidiary ledgers are correct. They include specific asset ledgers like inventory, and property, plant, and equipment, help reduce the general ledger size, and are updated at the end of the accounting period based on control accounts.

Step-by-step explanation:

When assessing the accuracy of the statement regarding subsidiary ledgers, it is important to understand their role in accounting. Subsidiary ledgers serve specific functions:

1. They commonly include ledgers for specific asset categories such as inventory and property, plant, and equipment.
2. They are utilized to reduce the size of the general ledger, making the accounting process more manageable and detailed.
3. They are updated at the end of the accounting period to reflect the transactions during that period based on the information in the control account. The ending balances in the subsidiary ledgers should agree with the related general ledger control account balances.

Therefore, all of the choices are correct regarding subsidiary ledgers, which means option 4 is the accurate answer.