Question

What is the recommended practice for reporting on Accounts Payable by office?

A. Define new GL account type
B. Define the classification on the transaction
C. Create new GL subaccounts for each office
D. Create a separate Chart of Accounts for each office

Answer 1

The recommended practice for reporting on Accounts Payable by office is to create new GL subaccounts for each office. This allows for better analysis and monitoring of spending in each office.

Step-by-step explanation:

The recommended practice for reporting on Accounts Payable by office is option C: Create new GL subaccounts for each office. By creating separate subaccounts for each office, you can track and report on the payables of each office individually. This allows for better analysis and monitoring of spending in each office.

For example, if an organization has offices in New York, London, and Tokyo, separate subaccounts can be created for each office within the main Accounts Payable account. Transactions related to each office can then be recorded under their respective subaccounts.

This practice provides transparency and accountability, making it easier to identify any issues or discrepancies specific to each office. It also simplifies reporting and analysis, as the financial data can be segmented by office.