SUBSIDIARY LEDGER

Sales Journal and Sales Return & Allowance Journal are given examples. Subsidiary ledger is required to prepare with the help of sales journal and sales return and allowance journal.

There are two customers in these journals namely Fine Traders and Global Merchant.
Subsidiary ledger is prepared for individual customer. So two subsidiary ledgers are prepared here.

(1) Fine Traders:
On January 1, sales made to fine traders. Subsidiary ledger shows the receivable of each customer (or payable of each supplier in case of purchase journal). Accounts receivable is debited in sales journal. Therefore 10,000 is recorded on debit side of subsidiary ledger and balance is 10,000.
On January 03, sales return is recorded and accounts receivable is credited in return journal. So 1,000 is recorded on credit side and the remaining balance is 9,000 (10,000 - 1,000)
On January 18, again sales were made, recorded on the debit side of ledger with 13,000 and balance is 22,000 (9,000 + 13,000).

(2) Global Merchant:
Same treatment was done with global merchant.

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