Functions of the Reconciliation Account: Vendor Master Records
When you post items to a subsidiary ledger, the system automatically posts the same data to the general ledger (see the following illustration). Each subsidiary ledger has one or more reconciliation accounts in the general ledger. These reconciliation accounts ensure that the balance of G/L accounts is always zero. This means that you can draw up balance sheets at any time without having to transfer totals from the subledgers to the general ledger.
You have to specify a reconciliation account in every vendor master record. Settings made in a reconciliation account also affect the vendor accounts:
For more information on reconciliation accounts, see the documentation on General Topics in Financial Accounting.