In accounting, a subsidiary ledger is the name given to a ledger that gives more detailed information than a general ledger. Subsidiary ledgers are used to break up large amounts of financial information into smaller, more manageable components. The combined balance of the subsidiary accounts equals the balance of the general ledger or control ledger.
The general ledger is the company's primary accounting record-keeping instrument. There should only be one general ledger for each business. The general ledger contains various accounts, such as accounts receivable and accounts payable. This information is a summarized version of what is contained in the various subsidiary ledgers of the organization.
Accounts Receivable Subsidiary Ledger
The accounts receivable subsidiary ledger contains detailed information of the payments owned to a company. For example, the accounts receivable subsidiary ledger would contain information on money owed to an organization from customers who have yet to pay for their products or services or payments owed by suppliers for returned merchandise.
Accounts Payable Subsidiary Ledger
While the general ledger should have a section summarizing accounts payable, the accounts payable subsidiary ledger provides a more detailed breakdown of the sources of accounts payable. Sources of accounts payable would include payments to suppliers and money owed to providers of utilities, among others.
Other Types of Subsidiary Ledgers
In addition to accounts payable and accounts receivable subsidiary ledgers, there are various other types of subsidiary ledgers. These include a production costs ledger, which records the cost of producing goods and services. A payroll subsidiary ledger includes detailed information regarding money owed to salaried employees as well as those being paid an hourly wage.
Leigh Richards has been a writer since 1980. Her work has been published in "Entrepreneur," "Complete Woman" and "Toastmaster," among many other trade and professional publications. She has a Bachelor of Arts in psychology from the University of Wisconsin and a Master of Arts in organizational management from the University of Phoenix.