General Ledger vs Sub Ledger

Publication Date :

07 Mar, 2019

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Table Of Contents

Differences Between General Ledger and Sub Ledger

Recording of financial information is books of account as per standard accounting principle. Both ledgers are used to record a financial transaction. The general ledger is the principal set of accounts. It records all financial transactions. The general ledger contains all debit and credit entries of transactions, and entry for the same is done in different accounts mainly; there are five types of accounts: assets, liabilities, equity, income, and expense.

Ledger helps understand the financing of business and helps analyze transactions. A subsidiary ledger is the subset of the general ledger in accounting. It is impossible to record all transactions in the general ledger; hence transactions are recorded in the sun ledger in a different account, and their total sum is reflected in the general ledger.

Differences Between General Ledger and Sub Ledger

What is General Ledger?

The general ledger is a set of master accounts where transaction records. It is the principal set of accounts and records all financial transactions. The general ledger contains all debit and credit entries of transactions, and entry for the same is done in different accounts mainly. There are five types of accounts: assets, liabilities, equity, income, and expense. But there are limitations in recording the transaction, so the sum of a different subset of sub-ledger is added to the general ledger. General ledger control sub-ledger. It is also referred to as a chart of account masters.

Examples of the general ledger are account receivable, account payable, cash management, bank management, and fixed asset. It is a group of accounts with different characteristics, and trial balance is used by using a general ledger.

What is Sub Ledger?

Sub-ledger is also known as a subsidiary ledger. It is a detailed subset of accounts that contains transaction information and is the subset of the general ledger in accounting. It is not possible to the general ledger; hence transactions are recorded in a sub-ledger in a different account, and their total sum is reflected in the general ledger. The total of the sub-ledger should always match with the line item amount on the general ledger. So, it contains detailed information regarding the business transaction and financial accounts. It can include purchase, payable, receivable, production cost, and payroll.

Sub-ledger is part of the general ledger, but the Trial balance is not prepared using a general ledger. Examples of the Subsidiary ledger are customer accounts, vendor accounts, bank accounts, and fixed assets. The groups of transactions have common characteristics.

General Ledger vs. Sub Ledger Infographics

Here we'll give you the top General Ledger vs. Sub Ledger differences.

Key Differences Between General Ledger and Sub Ledger

GL is a set of master accounts where transactions are recorded, whereas Sub-ledger is an intermediary set of accounts linked to the SL.
Examples of the general ledger are account receivable, account payable, cash management, bank management, and fixed assets; and Examples of sub-ledger are customer accounts, vendor accounts, bank accounts, and fixed assets.
The groups of transactions have different characteristics in the general ledger, whereas in the Subsidiary ledger, the groups of transactions have common characteristics.
There can be only one ledger account in the GL, and there can be many sub-ledger accounts.
GL contains a limited volume of data, whereas Sub-ledger includes a large quantity of data.
Chart of accounts, whereas sub-ledger does not have charts of accounts.
The general ledger has no such requirement for the ledger account, whereas the total of the sub-ledger should always match with the line item amount on the general ledger.
GL controls sub-ledger, whereas Sub-ledger is part of the general ledger.
The trial balance is prepared by using a general ledger, whereas trial balance is not prepared by using a general ledger.

Comparative Table

General Ledger (GL)	Sub Ledger (SL)
It is a set of master accounts where accounting transactions are recorded.	Sub-ledger is an intermediary set of accounts linked to the general ledger.
Examples of the GL are account receivable, account payable, cash management, bank management, and fixed asset.	Examples of sub-ledger are customer accounts, vendor accounts, bank accounts, and fixed assets.
The groups of transactions have different characteristics.	The groups of transactions have common characteristics.
There can be only one ledger account.	There can be many sub-ledger accounts.
It contains a limited volume of data.	It contains a large volume of data.
It has a chart of accounts.	It does not have charts of accounts.
There is no such requirement for the ledger account.	The total of the Subsidiary ledger should always match with the line item amount on the general ledger.
It controls the sub-ledger.	It is part of the general ledger.
The trial balance is prepared by using a general ledger.	The trial balance is not prepared by using a general ledger.

Final Thoughts

Both are used to record a financial transaction. The GL is a set of master accounts, transactions are recorded, and SL is an intermediary set of accounts linked to the general ledger. GL contains all debit and credit entries of transactions, and entry for the same is done. GL has all accounts needed in double-entry accounting books meaning each financial transaction affects at least two sun ledger accounts. Each entry has at least one debit against which one credit transaction is there. Sub-ledger is a detailed subset of accounts that contains transaction information.