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

To fully understand the difference between the general ledger and the subsidiary ledger (i.e. subledger), you need to have a solid understanding of how the general ledger fits into the overall flow of information in accounting records. The general ledger contains all of the debit and credits that have been recorded for transactions incurred by a company. The company will then summarize all of the debits and credits recorded in the general ledger to prepare the trial balance.

While the general ledger provides more detail than the trial balance, the subledger is where an extreme level of detail can exist for a particular general ledger account. For example, a company will have the accounts receivable account, but the company might have several different customers. The subsidiary ledger (subledger) would track accounts receivable by customer, while the general ledger would display the combined total accounts receivable balance across all customers.

While using a subledger can provide more detail, it also requires more effort and time to manage. Additionally, since the subledger may live outside of the general ledger, it is key to reconcile the two sources of data. If the general ledger does not reconcile with the subledger, then your financial statements will be inaccurate.

Other types of activity where subledgers are used include:

Accounts payable: Track amounts due to specific vendors or suppliers.

Inventory: Track inventory by warehouse or location. A separate system is often used to manage inventory.

Fixed assets: Track specific assets within class of assets (i.e. number of specific computers). A company will use a separate system to track its fixed assets.


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