What is an Accounts Payable Subsidiary Ledger?

An accounts payable subsidiary ledger is an account book that tracks all expenses of a business and the number of suppliers that the business owes. This ledger shows the transaction history of a particular business and the amount of owes its suppliers, as well as current and outstanding accounts payable. An accounts payable subsidiary ledger is also called creditors’ ledger or AP subledger (subaccount). This ledger has a separate account for each vendor or supplier containing the amount the company owes each of them. The amount payable in this subsidiary ledger is compared to the one in the general ledger to ensure accuracy.

How is the Accounts Payable Subsidiary Ledger Used?

Accounts payable subsidiary ledger or AP subledger is important to all businesses that take inventory of materials or products which are delivered by suppliers. Through the AP subledger, a business has an idea of which of its vendors it is owing and how much. AP subledger show specific amounts that a company owes specific suppliers, the total amount of then reconciled with the accounts payable balance in the general ledger. Unlike accounts payable in the general ledger that only reveals the total money payable by a business, account payable subsidiary ledger reveal details. For example; General ledger: $40,000 Account payable subsidiary ledger: Vendor A $8,000, Vendor B $5,000, and so on.

Related Topics

• What are Current Liabilities? – Financial Accounting
• How to Record Accounts Payable (Liability Accounts)? – Financial Accounting
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