A subsidiary is a group of
accounts with a common characteristic. The subsidiary ledger frees the general
ledger from the details of individual balances. A subsidiary ledger is an
addition to, and an expansion of the general ledger.
Two common subsidiary
ledgers are:
i) The accounts receivable
(or customers) subsidiary ledger, which collects transaction.
ii) The accounts payable (or
creditors) subsidiary ledger. Which collect trisection data of individual
creditors.
In each of these subsidiary ledgers, individual account are
usually arranged in alphabetical order.