Definition

Advantages of Subsidiary Ledgers

Subsidiary ledgers have several advantages:

  1. They show in a single account transactions affecting one customer or one creditor, thus providing up-to-date information on specific account balances.
  2. They free the general ledger of excessive details. As a result, a trial balance of the general ledger does not contain vast numbers of individual account balances.
  3. They help locate errors in individual accounts by reducing the number of accounts in one ledger and by using control accounts.
  4. They make possible a division of labor in posting. One employee can post to the general ledger while someone else posts to the subsidiary ledgers.
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