alltech company maintains a separate accounts recelvable account for each customer. on june 18, alltech…

alltech company maintains a separate accounts recelvable account for each customer. on june 18, alltech provides $5,600 of services on account to customer anthony and $1,900 of services on account to customer walker. how will these two transactions affect the control and subsidiary accounts?\na. the individual customer accounts in the subsidiary ledger will be increased with credits\nb. the control account, accounts recelvable, will be increased with a debit of $7,500\nc. after posting these transactions, the sum of the balances in subsidiary accounts recelvable will not equal the control account balance\nd. the control account will have a debit balance and the subsidiary accounts will have a credit balance. this keeps the accounting equation in balance

alltech company maintains a separate accounts recelvable account for each customer. on june 18, alltech provides $5,600 of services on account to customer anthony and $1,900 of services on account to customer walker. how will these two transactions affect the control and subsidiary accounts?\na. the individual customer accounts in the subsidiary ledger will be increased with credits\nb. the control account, accounts recelvable, will be increased with a debit of $7,500\nc. after posting these transactions, the sum of the balances in subsidiary accounts recelvable will not equal the control account balance\nd. the control account will have a debit balance and the subsidiary accounts will have a credit balance. this keeps the accounting equation in balance

Answer

Explanation:

Step1: Analyze each option

  • Option A: Accounts Receivable is an asset account. When services are provided on account, the individual customer accounts (subsidiary ledger) should be increased with debits (not credits), so this option is incorrect.
  • Option B: The total amount of services provided on account is (5600 + 1900=$7500). The control account, Accounts Receivable (an asset account), is increased with a debit. So, the control account, Accounts Receivable, will be increased with a debit of ($7500). This option is correct.
  • Option C: After posting these transactions, the sum of the balances in subsidiary Accounts Receivable (Anthony's account ($5600+) Walker's account ($1900=$7500)) will equal the control account balance (($7500)), so this option is incorrect.
  • Option D: Both the control account (Accounts Receivable) and the subsidiary accounts (Anthony's and Walker's Accounts Receivable) are asset accounts. Asset accounts have debit balances. So, this option is incorrect.

Answer:

B. The control account, Accounts Recovable, will be increased with a debit of $7,500.