theory

[TyErd]

explain how the use of subsidiary records improves the presentation of financial reports of a business.

[kakar0t]

When subsidiary records are used, details of all transactions are transferred to subsidiary records and the balances of these records are posted to control accounts, thus enabling a more streamlined general ledger where all totals are easily accessible by users of the information.

[mumakai]

When subsidiary records are used, clunky detail is transferred to subsidiary records and the balances of these records are posted to control accounts, thus enabling a more streamlined general ledger where all totals are easily accessible by users of the information.

just a few notes, change clunky detail to "unnecessary detail for the decision makers,"

[kakar0t]

done mate, thanks for the tip

[Yitzi_K]

When subsidiary records are used, clunky detail is transferred to subsidiary records and the balances of these records are posted to control accounts, thus enabling a more streamlined general ledger where all totals are easily accessible by users of the information.

just a few notes, change clunky detail to "unnecessary detail for the decision makers,"

Why? the info is still necessary, subsidiary ledgers just put them in a different place

[Aqualim]

explain how the use of subsidiary records improves the presentation of financial reports of a business.

I would of thought more along the lines of that it upholds the qualitative characteristic understandability by listing specific transactions related to each debtor and creditor of the business so that the information presented is understandable and comprehendable to non-accountants so that accurate decisions can be made for the reporting period.

[naved_s9994]

explain how the use of subsidiary records improves the presentation of financial reports of a business.

I would of thought more along the lines of that it upholds the qualitative characteristic understandability by listing specific transactions related to each debtor and creditor of the business so that the information presented is understandable and comprehendable to non-accountants so that accurate decisions can be made for the reporting period.

Thats incorrect! (A common mistake, of misinterpretation.)

As accountants we assume users of the accounting reports do not have a strong accounting background. Thats why we classify, etc. However, the T-Accounts and other things like General Ledger etc, are not provided to the user (customer).
Only the P/L statement, Bal Sheet, CFlow are provided to the customer (user). Hence, we classify these three reports, so thats its easier to understand. We dont actually classify the subsidiary..because, the user does not read it. Hence, the Qualitative characteristic of Understandibilty does NOT apply adequately to Subsidiary Ledgers unfortunately.

[kakar0t]

When subsidiary records are used, clunky detail is transferred to subsidiary records and the balances of these records are posted to control accounts, thus enabling a more streamlined general ledger where all totals are easily accessible by users of the information.

just a few notes, change clunky detail to "unnecessary detail for the decision makers,"

Why? the info is still necessary, subsidiary ledgers just put them in a different place

I've revised it further, makes more sense now lol

[naved_s9994]

explain how the use of subsidiary records improves the presentation of financial reports of a business.

What presentation?
Accountants only 'present' the P/L Statement, Cash Flow, Balance sheet to their customers (users).
So whether it be the General Journal, Subsidiary Ledgers, Control accounts, etc...It has no
link to the QC Understandibility!

[mba]

To clarify further:
Accounting principles are related to how we record financial data.
Accounting characteristics are related to how we prepare and present financial information to users.

I doubt you would see a question worded like that on an end of semester paper.

It would be:

Explain how the use of subsidiary records improves the financial records of a business.

In fact, there have been many questions like this asked on past Unit 3 exams. It has definitely been on one of the exams from the 2007 - current study design, just can't remember which one.

MBA.