Ledger

What is a Ledger?

A Ledger is a comprehensive record in accounting that consolidates all transactions pertaining to a company's financial activities. It maintains detailed information on every account, acting as the final repository where all financial data is condensed after being captured in other accounting records and books.

Short Description: A book or collection of accounts in which account transactions are recorded and summarized, providing the final trail for financial data.

• General Ledger: Encompasses all the company's financial accounts, including all journal entries posted to each account.
• Subsidiary Ledger: Detailed records supporting each account in the general ledger, often used for detailed tracking of accounts receivable and payable, assets, etc.
• Trial Balance: A method extracted from the ledger to verify that the total of all debits equals the total of all credits, ensuring balanced accounts.

The ledger acts as the backbone of accounting, allowing businesses to compile accurate financial statements and analyze financial health over specific periods.