The Accounts Receivable Subsidiary Ledger
Accounts Receivable Subsidiary Ledger
Businesses that involve few charge customers usually have an accounts receivable account for each customer in the general ledger. However, a large business with many charge customers may need to set up a separate ledger that contains an account for each charge customer. This ledger is known as the accounts receivable subsidiary ledger.
A subsidiary ledger is a ledger, or book, that contains the detailed data summarized as a controlling account in the general ledger.
Accounts receivable is a controlling account because it balances and equals the total of all account balances in the subsidiary ledger. The balance of accounts receivable, therefore, serves as a control on the accuracy of the balances in the account receivables subsidiary ledger when posting is complete.