Accounts payable is an account in the general ledger that controls the accounts payable subsidiary ledger.
What is account payable subsidiary?
An accounting ledger known as an accounts payable subsidiary ledger shows the transaction history and amounts owed to each supplier and vendor. Accounts payable (AP) from a supplier is merely a credit line extended to a company (the buyer) to provide them additional time to pay for the supplies.
Why does AP ledger requires a subsidiary ledger?
For some businesses, the accounts payable account has a significant volume. A subsidiary ledger for your accounts payable account will keep the specific spending data out of the general ledger account when you want to limit the transaction volume and amount of detail in your general ledger.
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