What is the Difference Between General Ledger and Sub Ledger?

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):

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.