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What Is an accounts Payable Subsidiary Ledger?

An accounts payable subsidiary ledger is an audit ledger that mirrors the transaction history and quantities owedto each supplier and vendor. An account payable (AP) is essentially an expansion of credit transaction from a providers that gives a business (the buyer in the transaction) time come pay because that the supplies. The subsidiary ledger records every one of the account payables the a firm owes. The payment terms are generally 30, 60, or 90 days.

An account payable subsidiary ledger is an audit ledger that mirrors the transaction history and amounts owed to every supplier and also vendor.An account payable (AP) is basically an expansion of credit from a providers that gives a service (the buyer) time to pay for the supplies.The subsidiary ledger records all of the account payables that a firm owes by which the accumulation total is lugged over come the basic ledger.

The balance in the customer account is periodically reconciled with the accounts payable balance in the general ledger come ensure accuracy. The accounts payable subsidiary ledger is additionally commonly referred to as the AP sub-ledger or subaccount.

expertise an account Payable Subsidiary Ledger

Companies can have assorted payables fan to vendors or service providers at any type of given time. These payables space short-term fan or IOUs native one agency to one more company. The total amount that payables fan to carriers is videotaped as account payable top top the general ledger.

The basic ledger is a understand ledger include a review of all the accounts that a agency uses in operation its business. The subsidiary ledgers roll up to the general ledger, which documents the accumulation totals that the subsidiary ledgers. The general ledger, in turn, allocates this totals into assets, liabilities, and equity accounts. In ~ most accountancy systems, the process is performed via accounting software.

When the jae won statements space prepared, the accounts payable total is detailed with various other short-term financial responsibilities under the present liabilities ar of the balance sheet. The account payable subsidiary ledger is a malfunction of the complete amount of payables listed on the basic ledger. In other words, the subsidiary ledger contains the individual payables fan to every of the suppliers and vendors, and also the amounts owed.

Since companies have the right to have lot of orders v the same merchant and many different vendors, the account payable subsidiary ledger keeps monitor of what's fan without having actually to do numerous accountancy entries top top the basic ledger. The subsidiary ledger is essentially a worksheet for every one of the payables fan to suppliers.

The account payable subsidiary ledger is helpful in giving internal accounting controls. The accounts payable subsidiary ledger quantities can be crosschecked through the aggregate amount reported on the general ledger to protect against errors in reporting. Administration can likewise check come ensure that each invoice native the vendors and suppliers room being recorded.

example of an accounts Payable Subsidiary Ledger

As one example, let's to speak The Ford Motor firm has a general ledger balance that shows a total accounts payable balance that $106 million. However, monitoring wants to see which companies are owed and the amounts owed.

The details needed deserve to be gleaned native the account payable subsidiary ledger. The subsidiary ledger mirrors the following:

Supplier A is fan $2 million because that tires.Supplier B is owed $6 million for car mats.Supplier C is owed $98 million for steel.

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The account payable subsidiary ledger is similar to various other subsidiary ledgers in the it merely provides details that the manage account in the general ledger. Other subsidiary account ledgers include the accounts receivable subsidiary ledger, the perform subsidiary ledger, and also the equipment subsidiary ledger.