Subsidiary Ledger

Subsidiary Ledger

A detailed record system that supports general ledger control accounts by maintaining individual transaction information for high-volume accounts like accounts receivable, accounts payable, or inventory, providing granular data while preserving general ledger simplicity.

For instance, while a company’s general ledger might show a single accounts receivable balance of $450,000, its accounts receivable subsidiary ledger would contain detailed records for each customer, showing individual invoices, payments, credit memos, and current balances for hundreds of customers, all adding up to the control account total.

Subsidiary ledgers serve several important functions: they reduce general ledger complexity by summarizing numerous individual accounts into single control accounts; they allow work distribution by enabling different staff to maintain different subsidiary records; they provide detailed information needed for customer or vendor communications without cluttering the main accounting records; and they enhance internal control through segregation of duties. Regular reconciliation between subsidiary ledger totals and their corresponding general ledger control accounts helps ensure accounting record accuracy. While traditionally maintained