What is a subsidiary ledger that is summarized in a controlling account in the general ledger called?

• A. Master Ledger
• B. Controlling Ledger
• C. Subsidiary Ledger
• D. Account Ledger

Answer: (C)

A subsidiary ledger is a group of accounts that provides detailed information for a specific category of transactions. It is used to support and provide more detailed breakdowns for the balances recorded in a controlling account found in the general ledger.

In the context of accounting, the main purpose of maintaining a subsidiary ledger is to manage and organize detailed data about individual accounts, while the controlling account in the general ledger summarizes the total of these individual accounts. For example, an accounts receivable subsidiary ledger would contain the individual accounts for each customer while the accounts receivable controlling account would show the total amount owed to the company by all customers.

This structure allows for better organization, tracking, and management of financial data. It's essential for maintaining accuracy in financial reporting and for facilitating efficient audits and reconciliations.