What type of activity does a subsidiary ledger typically track?

• A. Market trends
• B. Employee performance
• C. Customer and vendor transactions
• D. Operational costs

Answer: (C)

A subsidiary ledger is designed to maintain detailed records of specific types of transactions that aggregate into larger accounts listed in the general ledger. This includes tracking customer and vendor transactions, where each customer’s purchases, payments, and outstanding balance can be monitored in detail. By keeping such information organized in a subsidiary ledger, a business can easily manage and review individual transactions, which helps with financial reporting and enhances accuracy in tracking accounts receivable and accounts payable.

In contrast, options like market trends, employee performance, and operational costs do not typically involve detailed transaction tracking in a subsidiary ledger, as they pertain to broader analytical assessments, workforce evaluations, and expense management rather than individual transactional records.