General Ledger vs Subsidiary Ledger: Key Differences

During the interview, when asked about the variances between a general ledger and a subsidiary ledger in accounting, it's critical to showcase your understanding of these two essential financial tools.

General Ledger

The general ledger serves as the primary accounting record that exhibits a company's financial transactions.

• Summarizes all financial transactions in a single location.
• Provides an overview of the company's financial position.
• Contains all the main accounts, such as assets, liabilities, equity, revenue, and expenses.

Subsidiary Ledger

A subsidiary ledger is a detailed subset of the general ledger that breaks down specific accounts or categories.

• Focuses on detailed information for individual accounts.
• Includes sub-accounts like accounts receivable, accounts payable, and inventory.
• Helps in tracking transactions efficiently and maintaining a more granular view of financial data.

When distinguishing the two, remember that the general ledger provides a comprehensive overview, while the subsidiary ledger offers detailed breakdowns for specific accounts or categories.