Accounts payable subsidiary ledger

Definition

An accounts payable subsidiary ledger is a detailed record that tracks all individual creditor transactions and balances. It supports the general ledger by providing more granular information about amounts owed to suppliers and vendors.

5 Must Know Facts For Your Next Test

1. Accounts payable subsidiary ledgers help manage and monitor outstanding debts to suppliers.
2. Each entry in the subsidiary ledger corresponds to a specific vendor, detailing invoices, payments, and balances.
3. The total balance in the accounts payable subsidiary ledger should match the accounts payable balance in the general ledger.
4. These ledgers help ensure accuracy in financial reporting and aid in detecting discrepancies or errors.
5. They facilitate efficient tracking of payment due dates, helping businesses maintain good credit relations with suppliers.

Review Questions

• What purpose does an accounts payable subsidiary ledger serve?
• How does the accounts payable subsidiary ledger relate to the general ledger?
• Why is it important for businesses to maintain an accurate accounts payable subsidiary ledger?

Related terms

General Ledger:

A comprehensive record of all financial transactions within a company.

Accounts Receivable Subsidiary Ledger: A detailed record of individual customer transactions and balances.

Special Journals:

Journals used to record specific types of recurring transactions such as sales or purchases.