Detailed ledger supporting a general-ledger control account such as receivables, payables, or inventory.
A subsidiary ledger is a detailed record set that supports a control account in the general ledger. Instead of showing only one summarized balance, it breaks that balance into its individual customer, vendor, item, or account components.
Subsidiary ledgers make it possible to manage detail without cluttering the general ledger. They improve reconciliation, help isolate errors quickly, and give accountants a way to prove that the control-account balance is supported by underlying records.
Common subsidiary ledgers include accounts receivable by customer, accounts payable by vendor, and inventory by item or location. The general ledger carries the summarized control-account balance, while the subsidiary ledger holds the transaction-level detail.
At period end, the total of the subsidiary ledger should agree with the related control account in the general ledger. If the two totals do not match, the difference usually points to posting errors, incomplete entries, or timing issues that need investigation.
| Subsidiary Ledger Type | Detail Shown | Related Control Account |
|---|---|---|
| Accounts receivable ledger | Balance by customer | Accounts receivable |
| Accounts payable ledger | Balance by vendor | Accounts payable |
| Inventory records | Quantity and cost by item or location | Inventory |
Assume the accounts receivable control account in the general ledger shows 125,000. The accounts receivable subsidiary ledger should also total 125,000 when all customer balances are added together.
| Record | Amount |
|---|---|
| Accounts receivable control account | 125,000 |
| Total of customer balances in subsidiary ledger | 123,500 |
| Difference requiring investigation | 1,500 |
A subsidiary ledger does not replace the general ledger. It supports it. Financial statements still come from the general ledger after balances are reconciled and adjusted.