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Chapter 9
Accounting Information Systems
Remember that at the end of the month, when the general ledger is updated by the journals,
the total of all the subledger accounts must equal the balance of the appropriate control account
(accounts receivable or accounts payable).
To prove that the total of the individual subledger accounts is equal to the respective control
account balance in the general ledger, a reconciliation is prepared. From Figure 9.11, the balance of
accounts receivable was $1,591. By finding the total of the accounts receivable subledger account,
we can prove that the control account and subledger are in balance.
Jill Hanlon Retailer
January 31, 2016
General Ledger
Accounts Receivable
$1,591
Control account in the general ledger
The total of all subledger accounts
Jill Hanlon Retailer
Schedule of Accounts Receivable
January 31, 2016
Joe Blog
$635
Furniture Retailers
956
Total Accounts Receivable
$1,591
figure 9.20
A similar listing can be done for the accounts payable subledger. From Figure 9.19, the balance of
accounts payable was $80.The total of the accounts payable subledger is shown below.
Jill Hanlon Retailer
January 31, 2016
General Ledger
Accounts Payable
$80
Control account in the general ledger
The total of all subledger accounts
Jill Hanlon Retailer
Schedule of Accounts Payable
January 31, 2016
Antonio’s Electric
$0
Doug’s Maintenance
80
Total Accounts Payable
$80
figure 9.21
If the comparison of the general ledger control account and the total of the subledger accounts
shows that they do not balance, the difference must be investigated.The difference must be resolved
before the trial balance can be completed.
Returns
The special journals are designed to record specific types of transactions, but some transactions that
must be recorded do not fit into these special journals. As mentioned earlier, if a transaction does
not belong in one of the special journals, it must be recorded in the general journal. For example,
sales and purchase returns do not fit into the special journals and must be recorded in the general
journal.The only change to the way these transactions are recorded from what we learned earlier is
how the posting is processed for accounts receivable or accounts payable.
