What is a Subledger?

A subledger is a ledger containing all of a detailed sub-set of transactions. The total of the transactions in the subledger roll up into the general ledger. For example, a subledger may contain all accounts receivable, or accounts payable, or fixed asset transactions. Depending on the type of subledger, it might contain information about transaction dates, descriptions, and amounts billed, paid, or received. A summary-level entry is periodically recorded in the general ledger. If someone is researching information in the general ledger in an account that contains this summarized level of information, he or she must then access the subledger to review transaction-specific information.

As part of their year-end audit procedures, auditors may trace transactions from a subledger to the general ledger and from there to the financial statements, to ensure that transactions are being recorded properly in the accounting system.

In an accounting software package, a subledger is a database, rather than a manually-maintained book.

The Difference Between a Subledger and a General Ledger

There are several differences between a subledger and the general ledger, which are as follows:

Level of recordation. A general ledger contains the master set of accounts for an organization, in which all transactions are recorded (other than those recorded in subledgers).
Ending balance usage. The ending balances in the general ledger are used to create financial statements for each reporting period. Conversely, the information in a subledger only rolls up into the general ledger, and so is not directly involved in the creation of financial statements.
Number of ledgers. There may be a number of subledgers that roll up into the general ledger, whereas there is only one general ledger for a business.