Q. What is Accounts Receivable account?

Envisage a company with an Accounts Receivable account and an Accounts Payable account in its general ledger as well as no Accounts Receivable Subsidiary Ledger or Accounts Payable Subsidiary Ledger. How would this company identify to whom to send bills and in what amounts? As well how would employees know for which suppliers to write checks and in what amounts? Such subsidiary records are necessary also on paper or in a computer file. At this time is how the general ledger and subsidiary ledgers might look

When a sale on account is prepared to John Jones the debit is posted to both the control account and Accounts Receivable in the General Ledger and the subsidiary account John Jones in the Subsidiary Accounts Receivable Ledger. Similarly when a purchase on account is made from Bell Corporation the credit is posted to both the control account Accounts Payable in the General Ledger and to the subsidiary account Bell Corporation in the Subsidiary Accounts Payable Ledger. At the end of the accounting period the balances in every of the control accounts in the General Ledger must agree with the totals of the accounts in their respective subsidiary ledgers as shown above. A given company could have hundreds or even thousands of accounts in their subsidiary ledgers that illustrate the detail not supplied by the totals in the control accounts.