Future Business Leaders of America (FBLA) Accounting Practice Test

Which type of customer account is primarily tracked in the accounts receivable subsidiary ledger?

1. Regular customers

2. Credit customers

3. Cash customers

4. Potential customers

The correct answer is: Credit customers

The accounts receivable subsidiary ledger is specifically designed to track amounts owed to a business by its customers, primarily those who make purchases on credit. This means that credit customers are the ones whose transactions and payment histories are monitored through accounts receivable. Each credit customer has an individual account within the subsidiary ledger, allowing for detailed tracking of outstanding invoices, payments received, and any aging of accounts. In contrast, regular customers may include both cash and credit customers, but without specifying that they are credit customers, this option does not directly address the focus of the accounts receivable ledger. Cash customers make payments immediately at the time of purchase, so their transactions do not require tracking in accounts receivable since no credit is extended. Potential customers represent individuals or businesses that have not yet made any transactions, hence there would be no accounts receivable to track for them. Thus, the option that best aligns with the purpose of the accounts receivable subsidiary ledger is credit customers, as it encapsulates the accounts that will show amounts due from customers who have purchased on credit terms.