Accounting cycle revolves around identifying transactions, making relevant journal entries, posting trade debtors subsidiary ledger journal entries to ledgers and preparing trial balances and financial statements from those ledgers. A general ledger is the set of all accounts where journal entries are posted.
It is the main database of accounting transactions and provides input for preparation of a trial balance and eventually a complete set of financial statements. While the general journal records debit and credit effects of accounting transactions, the general ledger presents the cumulative view of those journal entries on the balance in each account.
Since general ledger hold all the historical journal entries, some key general ledger accounts become so complex that a separate ledger is needed to keep track of its transactions. In such a situation, it is necessary to create a subsidiary ledger to hold each customer account and include the grand total of that ledger trade debtors subsidiary ledger the general ledger.
Mr C defaulted on his payments. At the end of the month, when cash is received and Mr. C defaults, following journal entries are posted to general ledger accounts:. Accounts receivable account included in the general ledger above is a control account, i. A subsidiary ledger is needed for accounts receivable control account because there are potentially thousands of accounts receivable transactions in a period and the subsidiary ledger makes it easier to keep track of those transactions.
Below is an except from accounts receivable subsidiary ledger showing entries made on 24 September At the end of the month when payment is received and Mr. Trade debtors subsidiary ledger defaults, following entries are made in the subsidiary ledger:. Accounts payable subsidiary ledger and fixed assets subsidiary ledger are other commonly used subsidiary ledgers. Contact Us Privacy Policy Disclaimer. There are two types of accounting ledgers: Trade debtors subsidiary ledger ledger A general ledger is the set of all accounts where journal entries are posted.
Subsidiary ledger Since general ledger hold all the historical journal entries, some key general ledger accounts become so complex that a separate ledger is needed to keep track of its transactions. Following are opening balances of relevant accounts: C defaults, following journal entries are trade debtors subsidiary ledger to general ledger accounts: C defaults, following entries are made in the subsidiary ledger:
Withdrawal can usually take 1-3 business days to get processed. Save cars and searches to your personalMy Autotrader. Does trading actually risk financial services are in other is to regulating Top Option Robot to get customers above.