Subledger
Encyclopedia
The subledger, or subsidiary ledger, is a subset of the general ledger
used in accounting. The subledger shows detail for part of the accounting records such as property and equipment, prepaid expenses, etc. The detail would include such items as date the item was purchased or expense incurred, a description of the item, the original balance, and the net book value
. The total of the subledger would match the line item amount on the general ledger. This corresponding line item in the general ledger is referred to as the controlling account
. The subsidiary ledger balance is compared with its controlling account balance as part of the process of preparing a trial balance
.
As part of an audit, a method of testing balances may include tracing individual acquisitions to the subsidiary ledger for amounts and descriptions. The objective of this test is to determine that the current-year acquisitions schedule agrees with related subledger amounts, and the total agrees with the general ledger.
General ledger
The main accounting record of a business which uses double-entry bookkeeping. It will usually include accounts for such items as current assets, fixed assets, liabilities, revenue and expense items, gains and losses. Each General Ledger is divided into debits and credits sections. The left hand...
used in accounting. The subledger shows detail for part of the accounting records such as property and equipment, prepaid expenses, etc. The detail would include such items as date the item was purchased or expense incurred, a description of the item, the original balance, and the net book value
Book value
In accounting, book value or carrying value is the value of an asset according to its balance sheet account balance. For assets, the value is based on the original cost of the asset less any depreciation, amortization or Impairment costs made against the asset. Traditionally, a company's book value...
. The total of the subledger would match the line item amount on the general ledger. This corresponding line item in the general ledger is referred to as the controlling account
Controlling account
In accounting, the controlling account is an account in the general ledger for which a corresponding subsidiary ledger has been created. The subsidiary ledger allows for tracking transactions within the controlling account in more detail...
. The subsidiary ledger balance is compared with its controlling account balance as part of the process of preparing a trial balance
Trial balance
A trial balance is a list of all the nominal ledger accounts contained in the ledger of a business. This list will contain the name of the nominal ledger account and the value of that nominal ledger account. The value of the nominal ledger will hold either a debit balance value or a credit value...
.
As part of an audit, a method of testing balances may include tracing individual acquisitions to the subsidiary ledger for amounts and descriptions. The objective of this test is to determine that the current-year acquisitions schedule agrees with related subledger amounts, and the total agrees with the general ledger.