Subsidiary Ledger/ Account | See Accounting Now

A subsidiary account is an individual account that makes up part of a subsidiary ledger, which is itself part of a larger account.

Some accounts contain a number of smaller accounts.

Each of these smaller accounts is known as a subsidiary account (sub account)

Collectively, these accounts are known as a subsidiary ledger.

A typical subsidiary ledger is accounts receivable.

Accounts receivable is made up of individual customer accounts.

Here, each customer will have their own subsidiary account.

The sub accounts are summarized by a control account.

Every time a customer makes a transaction, it is recorded in the sub account.

At the same time, the transaction is recorded in the control account.

This way, the control account will contain a record of each and every transaction recorded in the subsidiary ledger.

Another typical ledger is accounts payable.

Accounts payable is made up of individual supplier accounts.

Each supplier will have their own subsidiary account.

The sub accounts are summarized by a control account.

Every time a supplier makes a transaction, it is recorded in the sub account.

At the same time, the transaction is recorded in the control account.

This way, the control account will contain a record of each and every transaction recorded in the subsidiary ledger.

Subsidiary Ledger/Account