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Accounting Practices 501 Chapter 5 Subsidiary ledgers Example Cathy Saenger, Senior Lecturer, Eastern Institute of Technology © Pearson 2011
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Accounting Practices 501
Chapter 5
Subsidiary ledgers
Example
Cathy Saenger, Senior Lecturer, Eastern Institute of Technology © Pearson 2011
Ch5B - Subs ledgers example 2
Let’s work our way through an example of the
Accounts Receivable Subsidiary Ledger
Accounts receivable subsidiary ledger
Ch5B - Subs ledgers example 3
The Accounts Receivable Subsidiary Ledger contained the above accounts at 1 March
G Green 450B Blue 200R Red 92 $742
Ch5B - Subs ledgers example 4
Let’s look at the transactions that occurred during the month and post them to the subsidiary ledger
Date
Accounts Receivable Subsidiary LedgerDetails Dr Cr Bal
G GREEN
1 Opening bal 450Dr
B BLUE
1 Opening bal 200Dr
R RED
1 Opening bal 92Dr
Ref
General LedgerDate
Details Dr Cr Bal
ACC RECEIVABLE CONTROL
1 Opening bal-
742Dr
Ref
$742
We’ll do the opening balances first
Remember the Subsidiary Ledger is separate from the General Ledger
G Green 450B Blue 200R Red 92 $742
The Acc Receivable Control account in the General Ledger balances with the total of the individual accounts in the subsidiary ledger
Ch5B - Subs ledgers example 5
Date
Accounts Receivable Subsidiary LedgerDetails Dr Cr Bal
G GREEN
1 Opening bal 450Dr
B BLUE
1 Opening bal 200Dr
R RED
1 Opening bal 92Dr
Ref
General LedgerDate
Details Dr Cr Bal
ACC RECEIVABLE CONTROL
1 Opening bal-
742Dr
Ref
9 G Green 276 36 240
10 G Green -92 -12 -80
184
DateSales JournalDetails
Acc rec Sales
GST collec
22 B Blue 200 200
200
Date
Cash Receipts JournalDetails Bank
GSTColl
Date
General Journal
Details Dr Cr
31 Bad Debts 80
GST 12
Acc rec-R Red
92
G Green 450B Blue 200R Red 92 $742
Accrec
$742
Ch5B - Subs ledgers example 6
9 G Green 276 36 240
10 G Green -92 -12 -80
184
DateSales JournalDetails
Acc rec Sales
GST collec
22 B Blue 200 200
200
Date
Cash Receipts JournalDetails Bank
GSTColl
Date
General Journal
Details Dr Cr
31 Bad Debts 80
GST 12
Acc rec-R Red
92
G Green 450B Blue 200R Red 92 $742
Accrec
Totals from the journals are posted to the Accounts Receivable Control account and individual customers’ amounts are posted to the customer accounts in the Subsidiary Ledger.
Transaction recorded in the General Journal will be posted to both the control account AND the individual customer’s account
Ch5B - Subs ledgers example 7
Date
Accounts Receivable Subsidiary LedgerDetails Dr Cr Bal
G GREEN
1 Opening bal 450Dr
B BLUE
1 Opening bal 200Dr
R RED
1 Opening bal 92Dr
Ref
General LedgerDate
Details Dr Cr Bal
ACC RECEIVABLE CONTROL
1 Opening bal-
742Dr
Ref
9 G Green 276 36 240
10 G Green -92 -12 -80
184
DateSales JournalDetails
Acc rec Sales
GST collec
22 B Blue 200 200
200
Date
Cash Receipts JournalDetails Bank
GSTColl
Date
General Journal
Details Dr Cr
31 Bad Debts 80
GST 12
Acc rec-R Red
92
G Green 450B Blue 200R Red 92 $742
31 Sales 834184SJ
31 Receipts 634200CRJ
Dr
Cr
Dr
Dr
Accrec
31 Bad Debts
NIL92
31 Bad Debts
65092
GJ
GJ Dr
Ch5B - Subs ledgers example 8
We can now post the individual customer amounts to the Subsidiary
Ledger
Ch5B - Subs ledgers example 9
Date
Accounts Receivable Subsidiary LedgerDetails Dr Cr Bal
G GREEN
1 Opening bal 450Dr
B BLUE
1 Opening bal 200Dr
R RED
1 Opening bal 92Dr
Ref
General LedgerDate
Details Dr Cr Bal
ACC RECEIVABLE CONTROL
1 Opening bal-
742Dr
Ref
9 G Green 276 36 240
10 G Green -92 -12 -80
184
DateSales JournalDetails
Acc rec Sales
GST collec
22 B Blue 200 200
200
Date
Cash Receipts JournalDetails Bank
GSTColl
Date
General Journal
Details Dr Cr
31 Bad Debts 80
GST 12
Acc rec-R Red
92
G Green 450B Blue 200R Red 92 $742
31 Sales 834184SJ
31 Receipts 634200CRJ
Dr
Cr
Dr
Dr
Accrec
31 Bad Debts
NIL92
31 Bad Debts
65092
GJ
GJ Dr
9 Sales 726 Dr276SJ
Ch5B - Subs ledgers example 10
Date
Accounts Receivable Subsidiary LedgerDetails Dr Cr Bal
G GREEN
1 Opening bal 450Dr
B BLUE
1 Opening bal 200Dr
R RED
1 Opening bal 92Dr
Ref
General LedgerDate
Details Dr Cr Bal
ACC RECEIVABLE CONTROL
1 Opening bal-
742Dr
Ref
9 G Green 276 36 240
10 G Green -92 -12 -80
184
DateSales JournalDetails
Acc rec Sales
GST collec
G Green 450B Blue 200R Red 92 $742
31 Sales 834184SJ
31 Receipts 634200CRJ
Dr
Dr
Dr
31 Bad Debts
NIL92
31 Bad Debts
65092
GJ
GJ Dr
9 Sales 726 Dr276SJThe return on the 10th has been recorded as a negative in the Sales Journal
10 Sales Return 634
Dr92SJ
Ch5B - Subs ledgers example 11
Date
Accounts Receivable Subsidiary LedgerDetails Dr Cr Bal
G GREEN
1 Opening bal 450Dr
B BLUE
1 Opening bal 200Dr
R RED
1 Opening bal 92Dr
Ref
General LedgerDate
Details Dr Cr Bal
ACC RECEIVABLE CONTROL
1 Opening bal-
742Dr
Ref
9 G Green 276 36 240
10 G Green -92 -12 -80
184
DateSales JournalDetails
Acc rec Sales
GST collec
22 B Blue 200 200
200
Date
Cash Receipts JournalDetails Bank
GSTColl
Date
General Journal
Details Dr Cr
31 Bad Debts 80
GST 12
Acc rec-R Red
92
G Green 450B Blue 200R Red 92 $742
31 Sales 834184SJ
31 Receipts 634200CRJ
Dr
Cr
Dr
Dr
Accrec
31 Bad Debts
NIL92
31 Bad Debts
65092
GJ
GJ Dr
9 Sales 726 Dr276SJ
CRJ22 Cash receipts NIL200
$634
10 Sales Return 634
Dr92SJ
• The total of the individual Accounts Receivable accounts in the Subsidiary Ledger will balance with the Accounts Receivable Control in the General Ledger
Ch5B - Subs ledgers example 12
Ch5B - Subs ledgers example 13
Exactly the same applies to the Accounts Payable Subsidiary
Ledger
How was that?
