What is an 'Accounts Receivable Subsidiary Ledger'

An accounts receivable subsidiary ledger is an accounting ledger that shows the transaction and payment history of each customer to whom the business extends credit. The balance in each customer account is periodically reconciled with the accounts receivable balance in the general ledger, to ensure accuracy. The subsidiary ledger is also commonly referred to as the subledger or subaccount.

BREAKING DOWN 'Accounts Receivable Subsidiary Ledger'

The usefulness of the accounts receivable subsidiary ledger lies in the fact that it can show, at a glance, the account status and amounts owed by a specific customer. For example, the general balance may show a total accounts receivable balance of $100,000, but it will not show which customer owes how much. This information can be gleaned from the accounts receivable subsidiary ledger. This ledger will show, for example, that Customer A owes $15,000, Customer B owes $25,000, Customer C owes $5,000, and so on.

Without this subsidiary ledger, a company with many customers would have difficulty tracking customer payments and transactions. Like other subsidiary ledgers, the accounts receivable subsidiary ledger merely provide details of the control account in the general ledger. Other subsidiary ledgers include accounts payable subsidiary ledger, inventory subsidiary ledger, and property, plant, and equipment subsidiary ledger.

RELATED TERMS
  1. Asset Ledger

    The asset ledger is the part of a company's accounting records ...
  2. Liability Ledger

    A liability ledger is the central file that contains a comprehensive ...
  3. Cash Book

    A financial journal that contains all cash receipts and payments, ...
  4. Due To Account

    A due to account is a liability account typically found inside ...
  5. Settlement Date Accounting

    Settlement date accounting is an accounting method that records ...
  6. Due From Account

    An asset account in the general ledger that indicates the amount ...
Related Articles
  1. Tech

    What is a Cryptocurrency Public Ledger?

    Investopedia looks at what is a cryptocurrency public ledger and how it operates.
  2. Tech

    Bitcoin's Blockchain Technology Tested by 40 Banks

    Banks have been among the first to look at the benefits of the cost advantages and efficiency that blockchain technology offers them.
  3. Investing

    The Importance Of Analyzing Accounts Receivable

    While investors often focus on revenues, net income, and earnings per share, they should not overlook the importance of analyzing accounts receivable.
  4. Tech

    Microsoft, Bank of America Team Up on Blockchain Technology

    The technology company and finance institution intend to introduce the digital ledger to trade finance transactions.
  5. Investing

    What's a Trial Balance?

    A trial balance is a worksheet listing the debit or credit balances of all the ledger accounts for an entity. Under accounting theory, the total of all the debits must equal the total of all ...
  6. Tech

    IBM Offers Open Source Blockchain Code (IBM)

    International Business Machines Corp. (IBM) announced Tuesday that it would donate 44,000 lines of blockchain‚Äč code to the Hyperledger Project, providing an open source foundation for building ...
  7. Tech

    Blockchain: The Backbone of Finance's Entire Future

    What is blockchain, and why is it now being used for everything from tracking loans to authenticating diamond purchases?
  8. Tech

    How Will Bitcoin 2.0 Change The World? (MSFT, OSTK)

    Since Bitcoin's 2009 launch, the decentralized, peer-to-peer digital currency and payment system has garnered worldwide interest.
  9. Investing

    Accounts Receivable

    Accounts Receivable (A/R) is an accounting term used to refer to the money that is owed to a company by its customers.
RELATED FAQS
  1. Are Subsidiaries Included in Company Statements?

    Learn how foreign and domestic subsidiaries are listed on the balance sheet of the parent company. Read Answer >>
  2. Are accounts payable counted as revenue?

    See how accounts payable is treated on the balance sheet, and why it is considered an expense and liability rather than revenue ... Read Answer >>
  3. How should investors interpret accounts receivable information on a company's balance ...

    Analyze accounts receivable information on a company's balance sheet carefully. Receivables offer confidence of future cash ... Read Answer >>
  4. How long are accounts receivable allowed to be outstanding?

    Learn about accounts receivable, including how long they typically remain outstanding, and how their payment or lack of payment ... Read Answer >>
  5. What is the difference between a subsidiary and a sister company?

    Discover the differences between subsidiary companies and sister companies, and understand how both are related to parent ... Read Answer >>
Hot Definitions
  1. Return On Equity - ROE

    The profitability returned in direct relation to shareholders' investments is called the return on equity.
  2. Working Capital

    Working capital, also known as net working capital is a measure of a company's liquidity and operational efficiency.
  3. Bond

    A bond is a fixed income investment in which an investor loans money to an entity (corporate or governmental) that borrows ...
  4. Compound Annual Growth Rate - CAGR

    The Compound Annual Growth Rate (CAGR) is the mean annual growth rate of an investment over a specified period of time longer ...
  5. Net Present Value - NPV

    Net Present Value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows ...
  6. Price-Earnings Ratio - P/E Ratio

    The Price-to-Earnings Ratio or P/E ratio is a ratio for valuing a company that measures its current share price relative ...
Trading Center