What is a subsidiary ledger account?

What is a subsidiary ledger account?

An accounts receivable subsidiary ledger is an accounting ledger that shows the transaction and payment history of each customer to whom the business extends credit. The subsidiary ledger is also commonly referred to as the subledger or subaccount.

What is the difference between a general ledger and a subsidiary ledger?

General ledger is the master ledger account which consolidates all subsidiary ledger accounts and which is posted to the trial balance. Subsidiary ledger is a categorization of general ledger to which journal entries are first posted.

What is a subsidiary ledger give an example?

A subsidiary ledger is a group of similar accounts whose combined balances equal the balance in a specific general ledger account. For example, an accounts receivable subsidiary ledger (customers’ subsidiary ledger) includes a separate account for each customer who makes credit purchases.

What are the two common examples of a subsidiary ledger?

Examples of subsidiary ledgers are: Accounts payable ledger. Accounts receivable ledger. Fixed assets ledger.

What is the purpose of subsidiary ledger?

A subledger or subsidiary ledger provides the details that make up the balance of specific general ledger accounts. Because general ledger accounts only provide an ending balance for each particular account, a subsidiary ledger is used to provide the details that result in that general ledger balance.

What is an example of a subsidiary?

Examples include holding companies such as Berkshire Hathaway, Jefferies Financial Group, The Walt Disney Company, WarnerMedia, or Citigroup; as well as more focused companies such as IBM, Xerox, or Microsoft.

What are the advantages of using a subsidiary ledger?

The advantages of using subsidiary ledgers are that they: Permit transactions affecting a single customer or single creditor to be shown in a single account, thus providing necessary up-to-date information on specific account balances.

Why are subsidiary ledgers used in accounting?

What is the types of subsidiary account?

We can divide the subsidiary books into the following types: Purchases return or return outwards book. Sales return or return inwards book. Bills receivable book. Bills payable book.

What is the advantage of subsidiary ledger?

Why do a business owner needs to maintain a subsidiary ledger for some accounts?

Facts. Subsidiary ledgers contain detailed information regarding business transactions and financial accounts. This information is maintained separately from the company’s general ledger. Large business organizations often use subsidiary ledgers because they have large numbers of financial transactions.

Are subsidiaries assets?

A subsidiary is a separate entity with its own legal identity. It can enter into contracts, own assets, incur liabilities and employ staff. Both a branch and a division are part of a company and are not separate entities.

What is a subsidiary record and a control account?

SUBSIDIARY RECORDS AND CONTROL ACCOUNTS Subsidiary records and control accounts are necessary to properly account for assets and liabilities and to analyze revenues and expenditures. In a full accrual system the control accounts are a part of the general ledger accounts and separate subsidiary records must be established.

What is mean by wholly subsidiary company?

A wholly owned subsidiary is a company whose common stock is 100% owned by another company , the parent company . Whereas a company can become a wholly owned subsidiary through an acquisition by the parent company or having been spun off from the parent company, a regular subsidiary is 51% to 99% owned by the parent company.

What is accounts receivable subsidiary ledger?

What is an Accounts Receivable Subsidiary Ledger. An accounts receivable subsidiary ledger is an accounting ledger that shows the transaction and payment history of each customer to whom the business extends credit.