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Accounts Receivable Subsidiary Ledger – Definition

Accounts Receivable Subsidiary Ledger Definition

An accounts receivable subsidiary ledger is an account book that shows a list of customers or clients who owe a company. Customers that are in debt to a company are listed in the ledger in order to ensure easy tracking of accounts receivable in a company.

This subsidiary ledger also reflect the transaction history of a company, it opens a separate account for each customer owing the company. The amounts of debts owed by customers recorded in this subsidiary ledger is compared with the accounts receivable balance in the general ledger.

An accounts receivable subsidiary ledger is the opposite of accounts payable subsidiary ledger.

A Little More on What is Accounts Receivable Subsidiary Ledger

Having a record of accounts receivable is important for any business that doesn’t want to go bankrupt. Keeping records in an accounts receivable subsidiary ledger aids the tracking of customers who owe a company or are in debt to the company. Also, for financial reporting purposes, it is important to keep an accounts receivable subsidiary ledger which is them reconciled with the accounts receivable of the company in the general ledger.

This subsidiary ledger is also called a subledger or subaccount, it gives the details of customers owing a company and the specific amount owed by each customer. Tracking customers payments and transaction history will be difficult without the subsidiary ledger, especially for companies with large number of customers.

Reference for “Accounts Receivable Subsidiary Ledger

https://www.investopedia.com/terms/a/accounts-receivable-subsidiary-ledger.asp

https://smallbusiness.chron.com › Accounting & Bookkeeping › Accounting

https://www.accountingtools.com/articles/what-is-the-accounts-receivable-ledger.html

https://www.accountingcoach.com/blog/subsidiary-ledgers-control-account

Academic research on “Accounts Receivable Subsidiary Ledger”

Financial fraud: Accounting theory and practice, Dooley, D. V. (2002). Financial fraud: Accounting theory and practice. Fordham Journal of Corporate & Financial Law, 8, S53.

The effect of combining compliance and substantive tasks on auditor consensus, Kaplan, S. E. (1985). The effect of combining compliance and substantive tasks on auditor consensus. Journal of Accounting Research, 871-877.

The effect of experience on the auditor’s organization and amount of knowledge, Tubbs, R. M. (1992). The effect of experience on the auditor’s organization and amount of knowledge. The accounting review, 67(4), 783.

The effect of alternative types of review on auditors’ procedures and performance, Payne, E. A., Ramsay, R. J., & Bamber, E. M. (2010). The effect of alternative types of review on auditors’ procedures and performance. Auditing: A Journal of Practice & Theory, 29(1), 207-220.

Deriving Accounts Receivable In An Events-Based, Relational Database System, Levitan, A. S. (1999). Deriving Accounts Receivable In An Events-Based, Relational Database System. The Review of Accounting Information Systems, 3(3), 47-52. Audit workpaper review is a primary means of quality control in auditing firms. While prior research shows that anticipation of a review affects preparers’ judgments, there is little research on the effects of the different review formats that occur in practice. The research that does exist examines the effects of adding discussion after the preparation of written review notes. We compare the effects on preparers of anticipating a real-time interactive review (where review notes are not prepared in advance) to the effects of anticipating receipt of more traditional written review notes. We also examine how these two different types of review affect the actual audit procedures preparers perform. A path analysis reveals that an interactive review leads auditors to focus more on the cognitively demanding, conclusion-oriented audit procedures. This, in turn, leads to better performance in identifying a trend that is indicative of fraud. We find no evidence that dysfunctional behavioral strategies operate under the less structured interactive review to compromise audit performance.

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