What types of subsidiary ledgers are used in manufacturing companies (Part I)?

2. Accounts receivable subsidiary ledger (accounts receivable aging)

Accounts receivable subsidiary ledger (also called accounts receivable aging) provides details of customer balances as of a particular date (e.g., balance sheet date). Accounts receivable subsidiary ledger (aging) is normally used to see the balance of accounts receivable by invoice and how long the invoices have been outstanding. All invoices are grouped into “buckets” to show their age. For example, aging “buckets” can be as follows:

  • Current
  • 1-30 days
  • 31-60 days
  • 61-90 days
  • 91-120 days
  • Older than 120 days

The determination of how long an invoice has been outstanding can be done from the date the invoice was issued (invoice date) or from the date the invoice is due (due date).

Accounts receivable subsidiary ledgers are reconciled to corresponding Accounts Receivable general ledger account(s) and can be used to calculate the allowance for doubtful accounts.

An example of an accounts receivable aging table is presented below. As with any other accounting information, such subsidiary ledgers will differ depending on the particular needs of a company:

Customer
Name

Invoice #

Invoice
Date

Due
Date

Aging

Current

1-30
Days

31-60
Days

61-90
Days

> 90
Days

Customer A

100010

3/31/20X3

3/31/20X3

1,000.00

       

Customer A

100011

1/28/20X3

2/28/20X3

 

329.90

     

Customer B

100012

12/25/20X2

1/25/20X3

   

108.75

   

Customer C

n/a

n/a

n/a

     

(50.00)

 

 

       

1,000.00

329.90

108.50

(50.00)

0.00

Note that the amount without an associated invoice number has a negative (credit) balance of $50 which may represent a credit memo, cash received but not applied against an invoice, or an amount owed by the company to a customer. For a more detailed discussion about unusual balances and what to do with them, refer to the article Accounting for unusual account balances and offsetting.

The total accounts receivable balance is $1,388.4 (i.e., $1,000.00 + $329.90 + $108.50 - $50.00). (This is an example, in real world numbers will probably be much larger). $1,000 of this balance is current, $329.90 is 1-30 days old (from the due date), and so on.

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