Chapter 2 Accounting Information System
Subsidiary Ledgers & Control Accounts
•
The general ledger accounts for accounts receivable and accounts
payable are called control accounts.
•
Accounts Receivable control and
•
Accounts Payable control
•
The individual customer/supplier accounts are in the Subsidiary
Ledger.
•
As the transactions occur they are recorded in the subsidiary ledger in
the individual accounts of the customers or suppliers.
•
Total of all debits and credits to individual subsidiary ledger accounts
are
posted to control account at month end.
•
Balance in control account equal to balance of all individual accounts in
subsidiary ledger.
• Control accounts and subsidiary ledgers can be used for number of
accounts such as accounts receivable, accounts payable, inventory
(perpetual), plant and equipment.
Rule 1
•
Debit must also equal credit in the general ledger.
Rule 2
•
Whatever is posted in detail in the subsidiary ledger must be posted
in total in the control account.
•
Individual customer transactions are posted from journals to
subsidiary ledgers daily .
•
Therefore subsidiary ledgers are always up to date.
•
At the end of the month , the totals of the special journals are
posted in the control accounts in the general ledger .
