The ledger

The ledger is the entire group of accounts maintained by a company. The ledger keeps in one place all the information about changes in specific account balances. The ledger provides the balance in each of the accounts. For example, the Cash account shows the amount of cash available to meet current obligations. The Accounts Receivable account shows amounts due from customers.

Companies may use various kinds of ledgers, but every company has a general ledger. A general ledger contains all the asset, liability, and owner’s equity accounts.

Companies arrange the ledger in the sequence in which they present the accounts in the financial statements, beginning with the balance sheet accounts. First in order are the asset accounts, followed by liability accounts, owner’s capital, owner’s drawing, revenues, and expenses. Each account is numbered for easier identification.

Share it:  Cite

More from this Section

  • Black Friday
    Black Friday is the last Friday of the month of November. This day is usually celebrated ...
  • Total manufacturing costs
    Total manufacturing costs refer to the sum of direct materials, direct labor, and manufacturing ...
  • Manufacturing Overhead Costs
    A company has many types of overhead costs. It may recognize these costs daily, as in ...
  • Bond indenture
    The terms of the bond issue are set forth in a legal document called a bond indenture. ...
  • Capital Expenditure
    Capital Expenditure is expenditure which is incurred in purchasing new property which ...