Subsidiary Ledger
A detailed ledger for a specific account like accounts receivable or payable.
A subsidiary ledger contains detailed accounts that support a general ledger control account—typically AR (individual customer balances) or AP (individual vendor balances). The subsidiary total must match the GL control account. This provides granular detail for day-to-day management without cluttering the general ledger.
Example
A wholesaler's AR subsidiary ledger shows Restaurant A owes $4,200, Restaurant B $2,800, and Catering Co. $6,000—totaling $13,000, matching the GL control account.
Why It Matters for Your Business
Without subsidiary ledgers, you'd know total receivables but not which customers owe what, making targeted collections nearly impossible.
Related Terms
More Accounting Terms
Accounts Payable
Money owed by a business to its suppliers or creditors for goods or services received but not yet paid for.
Accounts Receivable
Money owed to a business by its customers for goods or services delivered but not yet paid for.
Accrual Accounting
An accounting method that records revenues and expenses when they are incurred, regardless of when cash is exchanged.
Asset
Any resource owned by a business that has economic value and can provide future benefits.
Balance Sheet
A financial statement showing assets, liabilities, and equity at a specific point in time.
Related Financial Guides & Resources
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