What is the Difference Between General Ledger and Sub Ledger?
🆚 Go to Comparative Table 🆚The main difference between a general ledger and a sub-ledger lies in their purpose and the level of detail they provide for financial transactions within a business. Here are the key differences between the two:
General Ledger:
- A general ledger is a master document that contains financial information for the entire business.
- It provides a complete snapshot of a company's financial health.
- The general ledger contains line items summaries or totals from specific accounts in the sub-ledgers.
- It is used to prepare financial statements, such as the balance sheet, cash flow statement, and profit and loss statement.
- The general ledger contains transaction summaries across different account categories.
Sub-Ledger:
- A sub-ledger records transactional information only for specific types of financial activity or accounts.
- It explains transactions and feeds into the general ledger.
- Sub-ledgers are more narrowly focused and contain more detailed information.
- They are linked to the general ledger, but not all information in the sub-ledger is necessarily included in the general ledger.
In summary, a general ledger provides a comprehensive view of a company's financial transactions, while a sub-ledger is more focused on specific types of transactions or accounts. Both are essential components of a company's accounting system, working together to provide accurate and detailed records of financial activities.
Comparative Table: General Ledger vs Sub Ledger
Here is a table comparing the differences between a General Ledger (GL) and a Sub Ledger (SL):
Feature | General Ledger (GL) | Sub Ledger (SL) |
---|---|---|
Purpose | Principal set of accounts, records all financial transactions | Intermediary set of accounts linked to the general ledger |
Number of Accounts | Contains only one ledger account | Contains many sub-ledger accounts |
Volume of Data | Limited volume of data | Large volume of data |
Chart of Accounts | Has a chart of accounts | Does not have charts of accounts |
The main difference between a general ledger and a sub ledger is that the general ledger provides a complete snapshot of a company's financial transactions, while the sub ledger is an intermediary set of accounts linked to the general ledger and contains more detailed information. The total of the sub-ledger should always match with the line item amount on the general ledger.
- General Ledger vs Trial Balance
- Journal vs Ledger
- T Account vs Ledger
- Sales Ledger vs Purchase Ledger
- Ledger Balance vs Available Balance
- Subsidiary vs Division
- Balance Sheet vs Trial Balance
- Branch vs Subsidiary
- Bookkeeping vs Accounting
- Balance Sheet vs Consolidated Balance Sheet
- Subsidiary vs Joint Venture
- Statement of Affairs vs Balance Sheet
- Affiliate vs Subsidiary
- Bank Balance Sheet vs Company Balance Sheet
- Balance Sheet vs Profit vs Loss
- Financial Accounting vs Cost Accounting
- Balance Sheet vs Income Statement
- VLAN vs Subnet
- Balance Sheet vs Cash Flow Statement