Subsidiary Ledger
A subsidiary ledger is a detailed accounting record that supports and summarizes into a general ledger account, used to track individual transactions for specific accounts like accounts receivable, accounts payable, or inventory. It provides granular data for items such as customer balances or vendor details, while the general ledger holds aggregated totals. This structure enhances financial reporting accuracy and facilitates efficient management of high-volume transactional data.
Developers should learn about subsidiary ledgers when building or integrating accounting, ERP, or financial software systems to ensure proper data organization and compliance with accounting principles. It's essential for applications handling invoicing, inventory management, or payment processing, as it enables detailed tracking without cluttering the general ledger. Understanding this concept helps in designing databases and APIs that support scalable financial operations and audit trails.