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• General ledger


  Contains all the asset, liability, and owner's equity accounts of the company, grouped according to the chart of accounts and arranged in the order they appear on the financial statements
• Subsidiary ledger


  Separate ledgers that contain more detailed information about certain accounts in the general ledger
• Posting transactions


  Transferring journal entries to the ledger accounts to bring together the effect of the transactions to the individual accounts of the company
• Parts of the general ledger


  • Account title
  • Ledger account reference number
  • Date
  • Explanation
  • Reference
  • Debit
  • Credit
  • Balance
• General ledger accounts


  • Cash
  • Accounts receivable
  • Inventory
  • Property, plant and equipment
  • Accounts payable
• The general ledger shows the amount outstanding on each of the company's accounts as of a certain date
• The subsidiary ledger contains more detailed information about certain accounts in the general ledger
• Posting involves transferring journal entries to the ledger accounts to bring together the effect of the transactions to the individual accounts of the company
• The general ledger is arranged according to the order on how the accounts appear on the financial statements, starting from the asset accounts, followed by the liability accounts, and finally, the equity accounts including the revenues and expenses accounts
• Subsidiary ledger


  It is a group of accounts with a similar characteristic (e.g., accounts receivable and accounts payable). It is an additional record to the general ledger utilized by the company to track the per-individual accounts of the company's customers, creditors, and the like.
• General ledger


  Subsidiary ledger
• Types of subsidiary ledger

  • Accounts receivable ledger
  • Accounts payable ledger
• Accounts receivable ledger


  It is used mainly to track the individual account balances of the company's customers.
• Accounts payable ledger


  It displays the outstanding balances of each of the creditors of the company.
• Accounts receivable subsidiary ledger


  • KMA Corp
  • AFA Corp
• Accounts payable subsidiary ledger


  • ZJA Corp
  • AFPA Corp
  • PASAL Inc
• Advantages of subsidiary ledgers


  • Transactions are grouped according to each of the individual customer accounts
  • Provides up-to-date information on the different individual account balances
  • Helps in detecting errors and misstatements
  • Allows reconciliation between general ledger and subsidiary ledgers
  • Allows greater division of labor
• Large companies have lots of transactions from their customers who buy goods and merchandise on credit. If these companies utilize general ledger, can you imagine the time they will spend in order to determine the outstanding balances of its individual customers? How about for the company's individual creditors?
• In order to ease the burden, large companies use subsidiary ledger.
• 40 000
• Accounts Payable


  Account number 201
• Jan 3 Purchase of pots and plants from supplier on account
• 20 000
• Jan 10 Purchase of pots and plants from supplier on account
• 30 000
• 50 000
• Jan 17
• Payment of accounts payable to supplier
• Loan Payable


  Account number 210
• Jan 2 Cash loan from the bank
• 60 000