SUBSIDIARY
LEDGER
DEFINITION:
• The subledger, or subsidiary ledger, is a subset of the
general ledger used in accounting.
• Subsidiary ledger can be called book of analysis.
DEFINITION:
• A subsidiary ledger is a group of similar accounts whose
combined balances equal the balance in a specific general
ledger account. The general ledger account that summarizes
a subsidiary ledger's account balances is called a control
account or master account.
• Control accounts are sometimes known as total accounts. A
control account act as a summary of the ledger which it
controls.
THERE ARE THREE CONTROLLED
ACCOUNTS
• Sales ledger control account/ Total debtors account
• Purchases ledger control account/ Total creditors account
• Inventory Subsidiary ledger
SALES LEDGER CONTROL ACCOUNT:
• An accounting ledger that shows the transaction and
payment history separately for each customer to whom the
business extends credit. The balance in each customer
account is periodically reconciled with the accounts
receivable balance in the general ledger, to ensure accuracy.
The subsidiary ledger is also commonly referred to as the
subledger or subaccount.
PURCHASES LEDGER CONTROL ACCOUNT:
• An accounting ledger that shows the transaction history and
amounts owed separately for each supplier from whom the
business receives credit for purchases. The balance in the
customer accounts is periodically reconciled with the
accounts payable (AP) balance in the general ledger to
ensure accuracy. The AP subsidiary ledger is also commonly
referred to as the AP subledger or subaccount.
INVENTORY SUBSIDIARY
LEDGER
• Inventory subsidiary ledger provides information about
inventory stock on hand. Inventory subsidiary ledgers may
present information about raw materials, work in process, or
finished goods such as part number, part description, part
location, quantity on hand, unit cost, extended cost, and so
on.
FOR EXAMPLE SALES LEDGER CONTROL
ACCOUNT:
Subsidiary Ledger
PT. Company A PT. Company B
General Ledger
₱15,000. ₱45,000.0
00 0
(23/10) (25/10) Acc. Receivable
₱15,000.00(23/1
List of customer balance: 0)
₱45,000.00(25/1
PT. Company A ₱15,000.00 0)
PT. Company B ₱45,000 .00
SUM ₱60,000.00 ₱60,000.00
FOR EXAMPLE PURCHASE LEDGER CONTROL
ACCOUNT:
Subsidiary Ledger
CV. Company A CV. Company B
General Ledger
₱6,000.0 ₱8,000.0
0 0
(25/10) (23/10) Acc. Payable
₱6,000.00(25/1
List of supplier balance: 0)
₱8,000.00(23/1
CV. Company A ₱6,000.00 0)
CV. Company B ₱8,000.00
SUM ₱14,000.00 ₱14,000.00
FOR EXAMPLE INVENTORY SUBSIDIARY
LEDGER:
Subsidiary Ledger
Bolts Nuts
General Ledger
₱2,000.0 ₱1,000.0
0 0
(25/10) (23/10) Inventory
₱2,000.00(25/1
List of supplier balance: 0)
₱1,000.00(23/1
Bolts ₱2,000.00 0)
Nuts ₱1,000 .00
SUM ₱3,000.00 ₱3,000.00
ADVANTAGES OF CONTROL ACCOUNT:
• It helps in locating errors.
• It helps in checking the arithmetical accuracy of the ledger it
controls.
• It gives us ready made figures for Total debtors and Total
creditors on a certain date.
• Fraud is made more difficult by the use of control accounts.
CONCLUSION:
• A subsidiary ledger provides a company a detailed record
of specific items that are included in the balance of a general
ledger controlling accounting. In a merchandising
company, subsidiary ledgers are used to track the amounts
of receivables from customers, amounts of money owed to
suppliers, and quantities of products in inventory.
