Finimpact

Frequently Asked Questions(FAQ)

What Are the Main Subledger Accounts to General Ledger?
There are many kinds of sub-ledger accounts, including customer accounts, vendor accounts, bank accounts, and fixed assets. The main sub-ledger/subsidiary accounts include accounts receivable and accounts payable. The accounts receivable relates to debtors and the accounts payable relates to debtors.
What if I Don’t Want to Use General Ledger and the Double-Entry Accounting System?
You don’t really have a choice. The double-entry accounting system is what the current economic world works on. For every debit, there is a credit, and an entire system of checks and balances is in place to ensure everything is accounted for. While there are some alternatives, such as blockchain, the regulatory and political work relies on double-entry accounting for record-keeping and taxation purposes. And all accounting software is built on double-entry accounting principles.
What Is a Memorandum Account in Ledger Accounting?
Whilst maintaining control accounts most businesses will maintain what is referred to as a ‘memorandum.’ This is a separate list of individual receivable and payable amounts due from each customer and to each supplier, respectively. This simple ‘list of balances’ is used as a record so that companies know how much each customer is due to pay and how much they are due to pay each supplier. This assists with credit control and cash flow management.
What Are the Differences Between General Ledger vs. Trial Balance?
The general ledger is where all entries are displayed in a list, under the specific ledger accounts.

The trial balance is generated from the general ledger. The purpose of the trial balance is actually to see that everything balances. If there is a discrepancy in the debit or credit side, then it is time to evaluate the general ledger and the individual sub-ledger account.
What Are the Differences Between General Ledger vs. Balance Sheet?
The balance sheet is generated from the trial balance (which is generated from the general ledger). The balance sheet is sometimes referred to as the ‘Statement of Financial Position’. It demonstrates the financial position of a business at a given point in time. In contrast, the general ledger is not a financial statement open to the public. The balance sheet is. Both the trial balance and the balance sheet are far more limited in comparison to the general ledger, which is a record of all transactions.
What Are Subsidiary Books?
Subsidiary books refer to the general journal more than the general ledger. They are also called day books or special journals. Like subsidiary ledgers, subsidiary books are used to group transactions together. However, they are grouped by similarity of transaction type as opposed to the customer. Common subsidiary books include the Cashbook, Purchases book, Sales book, Purchases return or return outwards book, Sales return or return inwards book, Bills receivable book, Bills payable book and Journal proper.
What Happens if the Ledger Accounts Do Not Balance?
Well, the likelihood is that your books will not balance! It is rare for things to run so smoothly all the time, and there are so many things that can upset the system, such as a single entry from a single employee, with a misplaced comma, extra zero, or placement in the wrong column. There are other errors such as a customer paying too much, too little, the payment received in advance, etc. Good software systems can help to eliminate most of the stress associated with unbalanced accounts.

About the Author

Daniel Lewis

Daniel Lewis

MBA accredited investment professional

Dominique Broadway is an award-winning personal finance expert. She provides advice on all areas of personal finance including student loans. Her advice has been featured in numerous publications. Dominique is committed to helping tackle the student loan crisis and helping individuals make informed financial decisions.

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