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Rahul kumar (Accountant) (141 Points)

29 June 2012

Dear members please define general ledger and sub-ledger . Please give example also.

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CS RAJESH C.CHOUDHARY (ASSISTANT MANAGER) (14607 Points)
Replied 29 June 2012

A subsidiary 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. For example, an accounts receivable subsidiary ledger (customers' subsidiary ledger) includes a separate account for each customer who makes credit purchases. The combined balance of every account in this subsidiary ledger equals the balance of accounts receivable in the general ledger. Posting a debit or credit to a subsidiary ledger account and also to a general ledger control account does not violate the rule that total debit and credit entries must balance because subsidiary ledger accounts are not part of the general ledger; they are supplemental accounts that provide the detail to support the balance in a control account.

A general ledger - the ledger that contains all of the financial accounts of a business; contains offsetting debit and credit accounts (including control accounts)