When businesses were small there was only one general ledger that was maintained. Lately, as the size of businesses increased, the number of accounts in it also grew. Therefore, similar types of accounts are grouped together and their representative account is shown in the general ledger. Few examples include accounts receivable, accounts payable, property, etc.  These subsets of the general ledger are called Subledgers.



Let’s take an example of the general ledger control account “Accounts Receivable”, which is made up of the following individual debtors of the business:

A’s Receivable A/C = Subledger AR1

B’s Receivable A/C = Subledger AR2


A’s Balance + B’s Balance = Accounts Receivables (Control Account)

Subledger (AR1) + Subledger (AR2) =  Accounts Receivable A/C (To be shown in GL)



Example of subledger


So, one can imagine a big multinational corporation where hundreds and thousands of debtors, creditors, etc. are not uncommon. It becomes almost impossible to maintain one single ledger. Hence, a subledger is the best possible option to not only maintain the data efficiently, but also for calculations and quick access to information on an individual level.