Accounting Ledger

What is an accounting ledger?

An accounting ledger is an account or record used to store bookkeeping entries for balance-sheet and income-statement transactions. Accounting ledger journal entries can include accounts like cash, accounts receivable, investments, inventory, accounts payable, accrued expenses, and customer deposits. Accounting ledgers are maintained for all types of balance sheet and income statement transactions. Balance sheet ledgers include asset ledgers such as cash or accounts receivable. Income statement ledgers include ledgers such as revenue and expenses.

The accounting ledger – sometimes called the general ledger – provides a centralized repository to collect all account data rolled up from subledgers or modules, making it the backbone of any corporate financial system.

The accounting ledger is used to generate the key financial statements: the income statement, cash flow statement, and balance sheet for the company. “Posting” to an accounting ledger is the bookkeeping process of recording credits and debits. You can think of the accounting ledger as a collection of the chart of accounts, which is where all accounting journal entries end up.

Some general ledger accounts are summary records called control accounts. The details to support each control account are maintained outside in a subsidiary ledger. For instance, accounts payable might be a control account in the general ledger, and a subsidiary ledger contains each vendor’s activity. Other examples of general ledger accounts include equipment, accounts payable, and inventory.

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