What is the relationship between a control account and a subsidiary ledger?

What is the relationship between a controlling account and a subsidiary ledger? A controlling account summarizes all accounts in a subsidiary ledger. The balance of a controlling account equals the total of all account balances in its related subsidiary ledger.

Likewise, what are subsidiary ledgers and reconciliation accounts How are they related?

Reconciliation accounts are general ledger accounts that consolidate data from a group of related sub-ledger accounts, such as customers (accounts receivable) and vendors (accounts payable). Data cannot be posted directly into a reconciliation account.

Likewise, which accounts most likely use a subsidiary ledger? Subsidiary ledgers are used when there is a large amount of transaction information that would clutter up the general ledger.

Examples of subsidiary ledgers are:

Accounts payable ledger.
Accounts receivable ledger.
Fixed assets ledger.
Inventory ledger.
Purchases ledger.

Also asked, what is a subsidiary accounts receivable ledger?

An accounts receivable subsidiary ledger is an accounting ledger that shows the transaction and payment history of 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.

What is the purpose of a control account in the general ledger?

The purpose of the control account is to keep the general ledger nice and clean without any details, yet contain the correct balances to be used in the financial statements. Many of the accounts seen in the financial statements, take cash for instance, is shown as the control account in the balance sheet.

33 Related Question Answers Found

What are the two common kinds of subsidiary ledgers?

Two common subsidiary ledgers are: 1. The accounts receivable (or customers') subsidiary ledger, which collects transaction data of individual customers. 2. The accounts payable (or creditors') subsidiary ledger, which collects transaction data of individual creditors.

What are the advantages of using subsidiary ledgers?

The advantages of using subsidiary ledgers are that they: Permit transactions affecting a single customer or single creditor to be shown in a single account, thus providing necessary up-to-date information on specific account balances.

What is a subledger vs general ledger?

General ledger and sub ledger are such accounts that record business transactions. The key difference between general ledger and sub ledger is that while general ledger is the set of master accounts where transactions are recorded, sub ledger is an intermediary set of accounts that are linked to the general ledger.

What is the purpose of ledger?

The purpose of the ledger is to take the entries made in the journal and logs and tallies up all transactions that affect a specified account. The ledger does not show you the offsetting account.

Why do we prepare subsidiary journals?

-Journal Proper : Used to record those transactions for which there is no separate book. These subsidiary books are maintained because it may be impossible to record each transaction into the ledger as it occurs. And these books record the details of the transactions and therefore help the ledger to become brief.

What does subsidiary company mean?

A subsidiary, subsidiary company or daughter company is a company that is owned or controlled by another company, which is called the parent company, parent, or holding company. The subsidiary can be a company, corporation, or limited liability company. In some cases it is a government or state-owned enterprise.

What is subledger accounting?

A subledger is a ledger containing all of a detailed sub-set of transactions. The total of the transactions in the subledger roll up into the general ledger. For example, a subledger may contain all accounts receivable, or accounts payable, or fixed asset transactions.

What is contra accounting?

contra account definition. An account with a balance that is the opposite of the normal balance. For example, Accumulated Depreciation is a contra asset account, because its credit balance is contra to the debit balance for an asset account. Another example is the owner's drawing account.

What is the accounts receivable ledger?

Accounts receivable ledger. The accounts receivable ledger is a subledger in which is recorded all credit sales made by a business. If a customer does not pay the full amount of an invoice, a credit memo may be recorded to eliminate the residual balance.

What does a subsidiary ledger show?

An accounts payable subsidiary ledger is an accounting ledger that shows the transaction history and amounts owed to each supplier and vendor. The balance in the customer accounts is periodically reconciled with the accounts payable balance in the general ledger to ensure accuracy.

What are the two control accounts?

There are numerous control accounts which can be used, but the two main ones used by most businesses are the accounts receivable control account and the accounts payable control account.

Which account is least likely to have a subsidiary ledger?

Cards

Term Which of the following is a business resource?	Definition Raw Material, Labor, Information
Term In general, a special journal would not be used to record	Definition depreciation
Term Which account is least likely to have a subsidiary ledger?	Definition sales

What goes in the cash receipts journal?

A Cash receipts journal is a specialized accounting journal and it is referred to as the main entry book used in an accounting system to keep track of the sales of items when cash is received, by crediting sales and debiting cash and transactions related to receipts.

What is inventory subsidiary ledger?

Inventory Subsidiary Ledger Accounts. Inventory subsidiary ledger accounts usually contain separate sets of columns for purchases, sales, and the account balance. Each set has three columns, which are used to record the number of units, the cost of each unit, and the total cost.

What is General Ledger with example?

Examples of General Ledger Accounts

asset accounts such as Cash, Accounts Receivable, Inventory, Investments, Land, and Equipment. liability accounts including Notes Payable, Accounts Payable, Accrued Expenses Payable, and Customer Deposits.

What is a journal in accounting?

In accounting and bookkeeping, a journal is a record of financial transactions in order by date. The definition was more appropriate when transactions were written in a journal prior to manually posting them to the accounts in the general ledger or subsidiary ledger.

How does the subsidiary ledger and general ledger stay in balance?

A subsidiary ledger is a special ledger designed to provide information about accounts that would not normally be found in a general ledger. To remain in balance, the total of all accounts listed in a subsidiary ledger must match the total summary balance that appears in the general ledger.