Relationship between general ledger and sub

How to prepare general ledger to sub-ledger reconciliation

relationship between general ledger and sub

What is the difference between General Ledger and Sub Ledger? General ledger is the set of master accounts where transactions are recorded. In this article we explain the process for the general ledger to sub-ledger reconciliation. We also Step 2: Investigate the reasons for difference(s). We can use. Accounting is a detailed process for recording and reporting a company's financial information. Businesses often use several different ledgers and journals to.

The journal records transaction entries chronologically, that is, in order as they occur.

Difference Between General Ledger and Sub Ledger | General Ledger vs Sub Ledger

Thirdly, journal entries transfer post to the ledger. The ledger organizes transactions by account, to show each account's transaction history and current balance. Fourthly, just before the end of the reporting period, accountants use account balances and transaction histories to create a trial balance.

The primary purpose of this cycle step is to check ledger accounts for accuracy by trial balance.

relationship between general ledger and sub

The trial balance should show that total debits equal total credits across all accounts. They perform other kinds of error-checking at this time, as well, making corrections and adjustments when necessary.

Fifthly, the firm ends the cycle by publishing financial statements financial reports.

relationship between general ledger and sub

The Income statement, Balance sheet, and other statements, essentially, consist of account balances and account histories for the period just ending. Transactions enter the journal as the first and second steps in the accounting cycle. Journal entries transfer post to a ledger, as the third step. Ledgers organize entries by account. Bookkeepers in large firms still make transaction entries, of course, but quite a few other individuals may also contribute entries as well.

Entries are created manually, through onscreen forms, but many entries are also made automatically for instance, by a point of sales system. The software also automates other stages of the accounting cycle, including the third stage—posting journal entries to a ledger.

Until the middle of the twentieth century, when bookkeeping and accounting meant handwritten notes on paper, the posting of journal entries to ledger accounts was infrequently done during the accounting cycle. However, with electronic systems, journal entries can post to the ledger continuously. And, systems check for errors, continually. Finding errors and making corrections need not wait for the end-of-cycle trial balance period. While doing that, pay special attention to the transactions that are unusual in their nature.

How to prepare general ledger to sub-ledger reconciliation

For example, non-recurring transactions might have a higher risk of a mistake than transactions completed on recurring and regular basis. You must examine the sales journal for receivables and the purchases journal for payables ; have a look at posted entries, which were posted to the wrong account, transactions posted twice duplication errortransposition errors, etc.

Then you must look at the cash receipts and cash payments journals for receivables and payables, respectively.

relationship between general ledger and sub

Probably, you will require to repeat with your examination of the invoice register for accounts receivable and the purchase order journal for accounts payable. Reasons for the difference can contain the following: To recognize what requirements to be adjusted, you could use the template of the general ledger to sub-ledger reconciliation statement presented above. If reconciling items are resolved, the reconciliation procedure is completed.

If there is a difference, continue to examine the sub-ledger and journals that are a part of the revenue and expenditure cycles to recognize the problem and correct it. The main benefits of working with Reconciliationaccounting are below: Consistent Data Source — Reconciliationaccounting business give you consist and precise data which can be easily used for the benefits of the decision-making desires.

Introduction to accounting [Journal- Ledger & Trial balance] simple method(by kauserwise)

This in turn guarantees competence in workflow and there is no expenditure of time. Reconciliationaccounting work give significant cost reduction and gives you high Return of asset. High Superiority Work — Main benefits of Reconciliationaccounting work is to get high quality work as per your needs with reasonable rates.