Definition of Subsidiary Ledger
A subsidiary ledger contains the details to support a general ledger control account. For instance, the subsidiary ledger for accounts receivable contains the information for each of the company's credit sales to customers, each customer's remittance, return of merchandise, discounts, and so on. With these details in the subsidiary ledger, the Accounts Receivable account in the general ledger can report summary amounts for the accounts receivable activity.
Examples of Subsidiary Ledgers
By having the details of the accounts receivable activity in a subsidiary ledger, employees in a company's credit department of a company can access the credit sales information without having access to any information in the general ledger.
In job order costing systems, the job cost sheets (or job cost records) will serve as the subsidiary ledger containing the details for the general ledger account Work in Process. The Work in Process account will now be a control account containing summary amounts for direct materials, direct labor, factory overhead applied, transfers to finished goods, etc. Manufacturing personnel will have full access to the job cost sheets without having access to other information in the general ledger.
Since companies are integrating accounting records with their other information into one database, I assume there will be less use of the term subsidiary ledgers in the future. There will likely be reports generated to provide the information formerly contained in the subsidiary ledger.