Accounts Payable Subsidiary Ledger


DEFINITION of 'Accounts Payable Subsidiary Ledger'

An accounting ledger that shows the transaction history and amounts owed separately for each supplier from whom the business receives credit for purchases. The balance in the customer accounts is periodically reconciled with the accounts payable (AP) balance in the general ledger to ensure accuracy. The AP subsidiary ledger is also commonly referred to as the AP subledger or subaccount.

BREAKING DOWN 'Accounts Payable Subsidiary Ledger'

The utility of the accounts payable subsidiary ledger lies in the fact that it can show at a glance the amounts owed to a specific supplier. For example, the general balance may show a total accounts payable balance of $50,000, but it will not show which supplier is owed how much. This information can be gleaned from the accounts payable subsidiary ledger.

  1. Balance Sheet

    A financial statement that summarizes a company's assets, liabilities ...
  2. Trial Balance

    A bookkeeping worksheet in which the balances of all ledgers ...
  3. Generally Accepted Accounting Principles ...

    The common set of accounting principles, standards and procedures ...
  4. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to ...
  5. General Ledger

    A company's main accounting records. A general ledger is a complete ...
  6. Encumbrance

    A claim against a property by a party that is not the owner. ...
Related Articles
  1. Investing Basics

    Reading The Balance Sheet

    Learn about the components of the statement of financial position and how they relate to each other.
  2. Investing Basics

    The Working Capital Position

    Learn how to correctly analyze a company's liquidity and beat the average investor.
  3. Investing Basics

    Understanding The Cash Conversion Cycle

    Find out how a simple calculation can help you uncover the most efficient companies.
  4. Investing Basics

    How To Evaluate A Company's Balance Sheet

    Asset performance shows how what a company owes and owns affects its investment quality.
  5. Economics

    Calculating Long-Term Debt to Total Assets Ratio

    A company’s long-term debt to total assets ratio shows the percentage of its assets that are financed with long-term debt.
  6. Economics

    Explaining Like-for-Like Sales

    Companies use like-for-like sales figures to compare sales volume from one period to another.
  7. Investing

    How Worried Should We Be About China?

    An economic slowdown, a freezing up in trade and plunging markets and currencies are casting a shadow across Asia—and the globe. How worried should we be?
  8. Professionals

    Career Advice: Accountant Vs. Financial Planner

    Identify the key differences between a career in accounting and financial planning, and learn how your personality dictates which is the better choice for you.
  9. Economics

    Calculating Days Working Capital

    A company’s days working capital ratio shows how many days it takes to convert working capital into revenue.
  10. Professionals

    Career Advice: Accountant Vs. Controller

    Learn about the differences between controllers and accountants, how the two are related and which is the best career choice for aspiring bookkeepers.
  1. Are accounts payable an asset?

    Accounts payable is considered a current liability, not an asset, on the balance sheet. The value listed next to accounts ... Read Full Answer >>
  2. Are accounts payable counted as revenue?

    In financial accounting, revenue entries are made in the general ledger whenever a business receives, or expects to receive, ... Read Full Answer >>
  3. Should companies break out accounts receivables into subledgers?

    All companies that sell on credit should have subledgers for their accounts receivables, especially if the company also acts ... Read Full Answer >>
  4. Do dividends affect working capital?

    Regardless of whether cash dividends are paid or accrued, a company's working capital is reduced. When cash dividends are ... Read Full Answer >>
  5. Do prepayments provide working capital?

    Prepayments, or prepaid expenses, are typically included in the current assets on a company's balance sheet, as they represent ... Read Full Answer >>
  6. Does working capital include salaries?

    A company accrues unpaid salaries on its balance sheet as part of accounts payable, which is a current liability account, ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Real Estate Investment Trust - REIT

    A REIT is a type of security that invests in real estate through property or mortgages and often trades on major exchanges ...
  2. Section 1231 Property

    A tax term relating to depreciable business property that has been held for over a year. Section 1231 property includes buildings, ...
  3. Term Deposit

    A deposit held at a financial institution that has a fixed term, and guarantees return of principal.
  4. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s loss, so that the net change in wealth or benefit is zero. ...
  5. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
  6. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!