Ledgers are of two types- general ledger and subsidiary ledger. Both are important for the accounting process. There is some difference between general ledger and subsidiary ledger which are described below:
Difference between general ledger and subsidiary ledger
|Point||General Ledger||Subsidiary Ledger|
|Nature||It is a group of accounts with different characteristic||It is a group of accounts with a common characteristic.|
|Use||It is compulsory in the recording process.||It is optional in the recording process.|
|Trial Balance||Trial balance is prepared by using a general ledger.||The trial balance is not prepared by using a general ledger.|
|Control||It controls subsidiary accounts||It is a part of a general ledger.|
|Chart of Accounts||It has a chart of account||It has no chart of accounts.|
Accounting is an easy method for recording and coverage a company’s money transaction data. Businesses typically use many complete exchanges and also made deals they need different ledgers and journals to take care of records of monetary transactions.
Instead of inserting all business and money transactions into one ledger, an account informer typically use many subsidiary ledgers for this data for the future. Business founders and homeowners will review specific data associated with sharing deal and analysis on some of their company’s money data.
Concept and type of ledgers
Subsidiary ledgers will be easily purchasable and playable with updates in the market. The acquisition ledger contains data concerning the exact information. In short define; it collects unique information of the account holder. The subsidiary ledger contains data of customers for agency owner the corporate cash.
The costly ledgers contain management accounting data concerning the assembly of information and services. The payroll of the subsidiary ledger includes all the data concerning and value of workers or investment.
Subsidiary ledgers contain various data concerning business transactions and money accounts. This information is maintained in different ways from the company’s main book of account.
Faster growing business organizations typically use subsidiary ledgers as a result of they need exact numbers of monetary transactions. It should help to understand the market research of self-company and the final accounting includes data that doesn’t meet the policies of subsidiary ledgers.
However, an account holder chooses to use subsidiary ledgers once recording money transactions to limit the quantity of serving them with various data in the main book of account.
It should be comfortable for small business owners if they use automatic account software for maintaining their accounts. But if the company made countless daily deals then subsidiary ledger should be comfortable for you. Because it’s would need to have every single information inputted with hands.
You may like also: