Subsidiaries

Every task in Accounts Receivable centers on the need to create charges and credits for subsidiary accounts. A subsidiary is a group of individual balances, such as Accounts Receivable and Accounts Payable, that are linked to one General Ledger account. The G/L account serves as the control account, and the subsidiary accounts track the detail. The sum of the subsidiary balances equals the balance of the control account.

The Business Office application provides an unlimited number of subsidiaries. The following steps should be taken to prepare the system to create subsidiary transactions:

1.    Identify one or more control accounts in the General Ledger and assign a subsidiary code (e.g., AC and DD) to each control account.

2.    Create Subsidiary Master rows that match individuals with subsidiary codes. The Subsidiary Master row tracks the balance of the charges and credits.

3.    Create charge (e.g., tuition and fees) and credit (e.g., payment) transactions. To place the transaction in the subsidiary account, identify the individual (via their ID Number) and the subsidiary code (e.g., AC) for each transaction.

The following shows subsidiary accounts allow us to track balances for individuals (e.g., students, staff or faculty) and keep the Balance Sheet accounts in order. The tables below show a list of selected accounts from the General Ledger Chart of Accounts. The Accounts Receivable account in this list is unique because it serves as the control account for a subsidiary.

Like other G/L accounts, the Accounts Receivable account carries a balance that appears on General Ledger reports. However, it also ties to a list of subsidiary accounts that contain individual balances as shown below.

To keep track of the damage deposits collected from resident students, your organization will keep the deposit until the student leaves on-campus housing. At that time, the money (less any damage fees) is refunded to the student. Therefore, the Damage Deposit account shows up as a liability on your Chart of Accounts.

Since the Damage Deposit account is defined as a subsidiary control account, it is tied to a list of Damage Deposit subsidiary accounts. This list may or may not include the same people from the Accounts Receivable list. The illustration shows each subsidiary control account along with its list of subsidiary accounts.