What is the primary benefit of a subsidiary ledger?

The primary benefit of a subsidiary ledger is that it provides detailed individual information. A subsidiary ledger functions as a supporting ledger that breaks down the general ledger accounts into more detailed components. For example, within accounts receivable, each customer's account may have a separate record. This level of detail allows the organization to track specific transactions pertaining to individual accounts, monitor outstanding balances, and easily assess the status of individual customers or vendors.

By having this separate level of detail, businesses can ensure accurate management and reporting of accounts while maintaining a clearer overview within the general ledger. This detailed tracking facilitates better decision-making, improves accuracy in financial reporting, and enhances internal control systems.

The other options do not accurately represent the primary benefit. While cost reduction might be a secondary effect of efficient reporting, it is not the main purpose of implementing a subsidiary ledger. The general ledger is still very much needed, as it serves as the primary financial record of the company's overall financial standing. Finally, while subsidiary ledgers may streamline some aspects of tax reporting by clarifying individual accounts, this is not their primary function.