Purpose: (L.O. 1, 2) This exercise will discuss why a business employs special journals and subsidiary ledgers.
Up until this point, we have assumed that all transactions are recorded in the general journal and posted to the general ledger. In this chapter, we find that even small businesses can expedite the recording process by the use of special journals and subsidiary ledgers.
(a) Explain the advantages of using special journals.
(b) Explain the advantages of using subsidiary ledgers.