A subsidiary ledger is a special ledger that is used to record certain accounts and changes in more detail. The subsidiary ledger records are details of one of the accounts in the general ledger. Specifically, details of accounts payable and receivable.

3 types of ledgers:

  1. Ledger of Debt Subsidiary / Accounts Payable Subsidiary

A subsidiary ledger that functions to record changes in debt to creditors individually or specifically.

  1. Ledger of Receivable Subsidiary / Accounts Receivable Subsidiary Ledger

The accounts receivable subsidiary ledger is a special place to record changes in receivables, or bills, to individual debtor companies in certain companies.

  1. Inventory Ledger

The subsidiary ledger of merchandise inventory is used to record details of merchandise names by type of goods.

Benefits of Subsidiary Ledgers

  1. Facilitate an accountants preparation of financial reports. This is because the subsidiary ledger will reduce errors in the general ledger.
  2. As a comparison/test of accuracy in making a general ledger. This can be done by comparing the general ledger balance with the total balances in the subsidiary ledger.
  3. The process of accounting allows for the division of tasks.
  4. Make it easy to find out the amount of each element, such as receivables and payables, from related parties.

Subsidiary Ledger Recording Resources

The source of the subsidiary ledger recording comes from the existence of evidence that results in changes, both to the company's debts and receivables. For example: sales invoices, purchase invoices, proof of cash receipts and disbursements, as well as debit notes and credit notes.