Accounts Payable Subsidiary Ledger

Previously, we studied about “Accounts Receivable Subsidiary Ledger or Subledger, but here we are interested in another topic that is Accounts Payable Subsidiary Ledger or Subledger in Accounting.

You may also be Interested in “What is Accounts Payable”

Accounts Payable Subsidiary Ledger is the individual account of all of our suppliers or banks or financial institutions from whom the company purchased goods or services on Credit Basis.

A separate account is maintained for every supplier of the company and all the balances of all these Subsidiary Ledgers are totaled and transferred to Main Account or Control Account of Accounts Payable. Then the Final Balance of Accounts Payable Control is transferred to Balance Sheet in the Current Accounting Period or Accounting Cycle.

For the understanding this Subledger of Accounts Payable / Creditor, Let say that the company has three suppliers Mr. A, Mr. B And Mr. C. From Mr. A, the company purchased goods worth Rs. 50000, From Mr. B, 70000 and From Mr. C goods worth Rs. 80000 on Credit Basis. So, the company makes totaled purchased from all these suppliers goods worth Rs. 200000 on Credit Basis. Now All transactions related to Mr. A, Mr. B and Mr. C are recorded separately in their respective Ledgers and then we add all these balances and transferred to Accounts Payable Control Accounts at the end of Accounting Period.

Subsledgers / Subsidiary Ledger for all of these Suppliers can be shown as below:

For Supplier, Mr. A

ABC Company

Mr.A (Accounts Payable)

                                   Rs.                                                                              Rs.

                                                                                                 Purchases   50000

Balance c/d              50000

For Creditor, Mr. B

ABC Company

Mr.A (Accounts Payable)

                                  Rs.                                                                               Rs.

                                                                                                 Purchases    80000

Balance c/d             80000

For Accounts Payable, Mr. C

ABC Company

Mr.A (Accounts Payable)

                                     Rs.                                                                             Rs.

                                                                                                   Purchases   70000

Balance c/d                70000

The totaled of all these Balances (50000 + 80000 + 70000 = 200000) is transferred to Control Account of Accounts Payable and then the Final Balance of Accounts Payable is Transferred to Balance Sheet Under Current Liabilities Section On Liabilities & Equity Side.

So, it is all about Accounts Payable / Creditor Subsidiary Ledger or Subledger in Accounting.