Subsidiary ledger definition

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Since bookkeeping using ledgers is older than the United States, it was an ingenious way to double-check without having to actually do everything twice. Today, computerized accounting information systems use the same method to store and total amounts, but it takes a lot less time. The accounts payable subsidiary ledger is similar to other subsidiary ledgers in that it merely provides details of the control account in the general ledger.

Each individual account in the subsidiary accounts receivable ledger should show the customer’s name, address, credit rating, and credit limit, along with any other vital payment information. The accuracy and effectiveness of subsidiary ledgers heavily rely on the business’s accounting system and the person/s that maintain them. For example, a business can assign the duties of maintaining the accounts receivable ledger to one employee, and the maintaining of the accounts payable ledger to another. By maintaining subsidiary ledgers for multiple accounts, it’s possible to assign each subsidiary ledger to different employees.


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This sub ledger lists contains all of the account details for every credit customers including dates, balances, payments, and purchases made by each customer. Even a small company can have hundreds of customers who purchase goods on credit. If each customer account was reported in the general ledger, there would be several hundred accounts receivable accounts to sift through when analyzing the main ledger. Each entry is posted to both the appropriate general ledger accounts and the individual customer accounts. Part of the period-end closing process is to post the information in a subsidiary ledger to the general ledger.

  • An accounts payable (AP) is essentially an extension of credit from a supplier that gives a business (the buyer in the transaction) time to pay for the supplies.
  • There are essential accounting records, such as the general journal and general ledger, and then there are the optional but equally helpful ones such as the special journals, and subsidiary ledgers.
  • Only the Biloxi Shuckers, the Double-A affiliate of the Milwaukee Brewers, had fewer fans per game in 2023 with 2,440 fans per game.
  • Harold Averkamp (CPA, MBA) has worked as a university accounting instructor, accountant, and consultant for more than 25 years.
  • Without this subsidiary ledger, a company with many customers would have difficulty tracking customer payments and transactions.

Since both are zero and match, it would not be necessary to prepare a schedule of accounts payable. If there is a balance, a schedule of accounts payable would be prepared in the same manner as accounts receivable. In certain situations, there is a need for additional information to be recorded that supports the transactions being logged in the books of prime entry and the general ledger. They contain information that helps track numbers in a business or offers additional details to help understand more about where numbers have come from and what they mean. Subsidiary ledgers form part of the accounting process when help is needed to keep track of financial information that isn’t recorded in the books of prime entry.

Posting from Subsidiary Ledgers

For example, the subsidiary ledger will record all sales to the customers, any sales returns, advances received, remittances received against invoices etc. By maintaining subsidiary ledgers, companies can easily track and manage transactions for individual accounts, reconcile account balances, and generate reports on specific subsets of their financial data. An accounts payable subsidiary ledger is an accounting ledger that shows the transaction history and amounts owed to each supplier and vendor. An accounts payable (AP) is essentially an extension of credit from a supplier that gives a business (the buyer in the transaction) time to pay for the supplies. The subsidiary ledger records all of the accounts payables that a company owes.

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Unit 8: Accounting Information Systems

The subsidiary ledgers roll up to the general ledger, which records the aggregate totals of the subsidiary ledgers. The general ledger, in turn, allocates these totals into assets, liabilities, and equity accounts. Within most accounting systems, the process is performed via accounting software.


Running a trial balance reveals any discrepancies between the accounts payable ledger and the subsidiary ledger. You can use the information in your accounts payable subsidiary ledger to create an accounts payable aging report. The aging report shows the name of the vendor and lists the individual overdue invoices. The aging report also shows the outstanding amount for each invoice and how long the invoice has gone unpaid.

Subsidiary Ledger Definition

For example, the accounts receivable control account in the general ledger only shows us the summary of the transactions for a certain period. The general ledger is the ledger account that aggregates the balances of all the related subsidiary ledger accounts. Companies can have various payables owed to vendors or suppliers at any given time. These payables are short-term debts or IOUs from one company to another company. The total amount of payables owed to suppliers is recorded as accounts payable on the general ledger.


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