What is A Subsidiary Ledger?

A subsidiary ledger, also known as a subledger, is a detailed accounting record that provides additional information and breakdowns of specific types of transactions or accounts within a company’s overall accounting system. Subsidiary ledgers are used to maintain detailed information for individual accounts that make up the general ledger.


Here are the key characteristics and functions of a subsidiary ledger:

  1. Detailed Accounts: A subsidiary ledger contains detailed information for specific types of transactions or accounts, such as accounts receivable, accounts payable, inventory, fixed assets, or customer accounts. Each subsidiary ledger focuses on a particular type of transaction or account, allowing for more detailed tracking and analysis.
  2. Transaction Details: Subsidiary ledgers provide a record of individual transactions within each account, including dates, descriptions, amounts, and other relevant details. This allows for a more granular level of detail compared to the general ledger, which summarizes transactions at a higher level.
  3. Subsidiary Accounts: Within each subsidiary ledger, individual subsidiary accounts are maintained for each customer, supplier, inventory item, asset, or other relevant entity. These subsidiary accounts track the specific transactions and balances associated with each entity.
  4. Supporting Documentation: Subsidiary ledgers often include supporting documentation for transactions, such as invoices, purchase orders, sales orders, receipts, or other relevant documents. This documentation provides additional context and verification for the transactions recorded in the subsidiary ledger.
  5. Reconciliation: Subsidiary ledgers are reconciled periodically with the corresponding general ledger accounts to ensure accuracy and consistency in the financial records. This reconciliation process involves comparing the balances in the subsidiary ledger accounts to the corresponding balances in the general ledger accounts and identifying any discrepancies that need to be resolved.
  6. Analysis and Reporting: Subsidiary ledgers provide detailed data for analysis and reporting purposes. They allow businesses to track and analyze transactional activity within specific accounts or categories, monitor trends, identify patterns, and make informed decisions based on detailed financial information.
  7. Integration with General Ledger: Transactions recorded in subsidiary ledgers are periodically summarized and posted to the corresponding accounts in the general ledger. This integration ensures that the subsidiary ledger balances are reflected accurately in the overall financial statements and reports generated by the accounting system.


Overall, subsidiary ledgers play a crucial role in maintaining detailed records of specific types of transactions or accounts within a company’s accounting system. They provide a more detailed and organized way of tracking financial information, supporting analysis, and ensuring accuracy in financial reporting.

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