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Subsidiary ledger
Subsidiary ledgers are subsets of the general ledger that provide detailed records for specific accounts. There are typically three main control accounts: sales ledger for accounts receivable, purchases ledger for accounts payable, and inventory subsidiary ledger. The subsidiary ledgers track individual customer and supplier balances as well as inventory stock details. The totals from the subsidiary ledgers must equal the balances in the related general ledger control accounts. Subsidiary ledgers help locate errors, check accuracy, and provide ready totals for financial reporting.
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Definition and overview of subsidiary ledgers, subledgers, and control accounts in accounting.
Introduction to the recording of transactions in accounting through subsidiary ledgers.
Identification of three major control accounts: Sales ledger, Purchases ledger, Inventory subsidiary ledger.
Details of the Sales Ledger Control Account and its reconciliation with accounts receivable.
Overview of the Purchases Ledger Control Account and its reconciliation with accounts payable.
Information provided by the inventory subsidiary ledger regarding stock levels and costs.
Example illustrating the Sales Ledger Control Account with customer balances and general ledger.
Example illustrating the Purchases Ledger Control Account with supplier balances and general ledger.
Example demonstrating inventory subsidiary ledger with balances of bolts and nuts.
Advantages of control accounts in error detection, accuracy checking, and fraud prevention.
Summary of the importance of subsidiary ledgers for tracking receivables, payables, and inventory.
Closing of the presentation.
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Subsidiary ledger
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- 2. Definition : (Pengertian) Thesubledger, or subsidiary ledger, is a subset of the general ledger used in accounting. Subsidiary ledger can called book of analysis (source : wikipedia )
- 3. Definition : (Pengertian) Asubsidiary ledger is a group of similar accounts whose combined balances equal the balance in a specific general ledger account. The general ledger account that summarizes a subsidiary ledger's account balances is called a control account or master account. Control accounts are sometimes known as total accounts. A control account act as a summary of the ledger which it controls. (source : Dr. T 's Accounting Problems and Tax Purpose of Subsidiary Ledgers Definition.htm)
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- 5. There are threecontrol accounts. Sales ledger control account / Total debtors account Purchases ledger control account / Total creditors account. Inventory Subsidiary ledger
- 6. Sales Ledger ControlAccount: An accounting ledger that shows the transaction and payment history separately for each customer to whom the business extends credit. The balance in each customer account is periodically reconciled with the accounts receivable balance in the general ledger, to ensure accuracy. The subsidiary ledger is also commonly referred to as the subledger or subaccount. Sources Of Information For Sales Ledger Control Account: Sales Sales Book Cash and Cheques received Cash Book Dishonoured Cheques Cash Book Discount allowed Cash Book Bad debts Journal
- 7. Purchases Ledger ControlAccount: An accounting ledger that shows the transaction history and amounts owed separately for each supplier from whom the business receives credit for purchases. The balance in the customer accounts is periodically reconciled with the accounts payable (AP) balance in the general ledger to ensure accuracy. The AP subsidiary ledger is also commonly referred to as the AP subledger or subaccount. Sources Of Information For This Account Purchases Purchase Book Purchases Returns Purchase Book Cash and cheque paid Cash Book Discount received Cash Book Cash refund’s from creditors Cash Book Return
- 8. Inventory subsidiary ledger Inventorysubsidiary ledger provides information about inventory stock on hand. Inventory subsidiary ledgers may present information about raw materials, work in process, or finished goods such as part number, part description, part location, quantity on hand, unit cost, extended cost, and so on. Source: http://simplestudies.com/what_types_of_subsi diary_ledgers_are_used_in_manufacturing_com (source : wikipedia ) panies_part_two.html/page/2
- 9. For example SalesLedger Control Account: Subsidiary Ledger PT. PANTANG MUNDUR PT. MAJU TERUS Rp. 15.000.000 (23/10) Rp. 45.500. 000 (25/10) List of customer balance : PT. MAJU TERUS Rp. 45.500.000 SUM Rp. 60.500.000 Acc. Receivable Rp15.000.000 (23/10) Rp45.500.000 (25/10) Rp. 15.000.000 PT. PANTANG MUNDUR General Ledger Rp. 60.500.000
- 10. For example PurchaseLedger Control Account: Subsidiary Ledger CV. SETIA ABADI CV. SINAR DUNIA Rp. 6.500.000 (25/10) List of supplier balance : CV. SETIA ABADI Rp. 8.000.000 SUM Rp. 14.500.000 Acc. Payable Rp. 8.000.000 (23/10) Rp. 6.500.000 (25/10) Rp. 6.500.000 CV. SINAR DUNIA Rp. 8.000.0 00 (23/10) General Ledger Rp. 14.500.000
- 11. For example inventory subsidiaryledger: Subsidiary Ledger BOLTS General Ledger NUTS Rp. 2.500.000 (25/10) List of supplier balance : Bolts Rp. 1.000.000 SUM Rp. 3.500.000 inventory Rp. 1.000.000 (23/10) Rp. 2.500.000 (25/10) Rp. 2.500.000 Nuts Rp. 1.000.0 00 (23/10) Rp. 3.500.000
- 12. Advantages Of Control Account: It helps in locating errors. It helps in checking the arithmetical accuracy of the ledger it controls. It gives us ready made figures for Total debtors and Total creditors on a certain date. Fraud is made more difficult by the use of control account.
- 13. Conclusion : Asubsidiary ledger provides a company a detailed record of specific items that are included in the balance of a general ledger controlling accounting. In a merchandising company, subsidiary ledgers are used to track the amounts of receivables from customers, amounts of money owed to suppliers, and quantities of products in inventory.
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