Ledger: What it is and what it is used for
Posted: Sun Dec 15, 2024 7:22 am
The double-entry system is used to record transactions. In this way, the accounts are represented in the form of a “T”, where the left side is called “DEBIT” and the right side “CREDIT”.
The operations in the journal are transferred grouped by accounts to the general ledger. For example, if we have a cash collection entry from a customer, we will record the amount collected in the credit in the customer's general ledger account and the amount in the debit in the cash account.
The general ledger, although not one of the mandatory accounting books, is one of the most used by accountants in their daily operations , since it records one by one all the accounts that have been used and their movements during the accounting period.
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1) Brief history of the ledger
When accounting was done by hand, the ledger was a book with thick brown covers that was filled out by hand. These books are now part of the history of accounting, some of which are now museum pieces or relics kept by long-established companies alongside other antiques.
Nowadays, the general ledger is generated by modern accounting programs such as Sage 50 , which automatically transfer entries from the journal to the general ledger, and specific applications can be found for self-employed workers and SMEs , or for consultancies and offices.
2) What is the general ledger used for?
The main function of the general ledger is to reflect in each of the accounting accounts the operations that occur and are recorded in the journal during the financial year. The operations are recorded chronologically, so that the balance remaining in each account can be known for the recorded operations.
We are faced with one of the most commonly used tools for accounting review , along with the balance sheet.
3) How can it help you review your accounting?
Although a balance sheet can give us clues about accounts to review, for example, accounts with a balance contrary to their nature, to carry out this review we will have to go to the account's general ledger.
The review of bank account ledgers, which must be reconciled with bank statements, is one of the tasks that every good accountant must perform, since having the banks up to date and reconciled is a symptom of good accounting.
The ledgers of loan accounts are also frequently used, since bank liabilities must be perfectly recorded and compared with the CIRBE, since if the banking entities request the bank pool and the data provided substantially disagree with the CIRBE, they can call into question the accounting and tighten the conditions for access to credit.
Although many accounting programs facilitate the reconciliation of accounting accounts , consulting the ledgers is still a recurring task performed by many accountants, to see communication email list outstanding customer credits, pending payments to suppliers, to check that all operations are accounted for, or that there are no errors in the accounting record of the operations.
4) How can your accounting software make it easier for you to use the general ledger?
The review or scoring of the majors can be done in different ways:
Directly in the accounting programs that facilitate it.
Exporting them to a sheet.
Printing them out and manually punching the operations.
Each accountant uses the technique that is most comfortable for them, but the use of accounting programs such as Sage 50 greatly facilitates analysis directly from the general ledger program itself.
Sage 50 makes it easy to navigate through the general ledger by allowing easy access to the accounting entries made. In addition, it can be sorted in different ways and has different analysis tools. It also facilitates exporting to different formats such as Excel, PDF and CSV.
The operations in the journal are transferred grouped by accounts to the general ledger. For example, if we have a cash collection entry from a customer, we will record the amount collected in the credit in the customer's general ledger account and the amount in the debit in the cash account.
The general ledger, although not one of the mandatory accounting books, is one of the most used by accountants in their daily operations , since it records one by one all the accounts that have been used and their movements during the accounting period.
Download your FREE copy of the “Basic Kit for Keeping Your Accounting Up to Date”
1) Brief history of the ledger
When accounting was done by hand, the ledger was a book with thick brown covers that was filled out by hand. These books are now part of the history of accounting, some of which are now museum pieces or relics kept by long-established companies alongside other antiques.
Nowadays, the general ledger is generated by modern accounting programs such as Sage 50 , which automatically transfer entries from the journal to the general ledger, and specific applications can be found for self-employed workers and SMEs , or for consultancies and offices.
2) What is the general ledger used for?
The main function of the general ledger is to reflect in each of the accounting accounts the operations that occur and are recorded in the journal during the financial year. The operations are recorded chronologically, so that the balance remaining in each account can be known for the recorded operations.
We are faced with one of the most commonly used tools for accounting review , along with the balance sheet.
3) How can it help you review your accounting?
Although a balance sheet can give us clues about accounts to review, for example, accounts with a balance contrary to their nature, to carry out this review we will have to go to the account's general ledger.
The review of bank account ledgers, which must be reconciled with bank statements, is one of the tasks that every good accountant must perform, since having the banks up to date and reconciled is a symptom of good accounting.
The ledgers of loan accounts are also frequently used, since bank liabilities must be perfectly recorded and compared with the CIRBE, since if the banking entities request the bank pool and the data provided substantially disagree with the CIRBE, they can call into question the accounting and tighten the conditions for access to credit.
Although many accounting programs facilitate the reconciliation of accounting accounts , consulting the ledgers is still a recurring task performed by many accountants, to see communication email list outstanding customer credits, pending payments to suppliers, to check that all operations are accounted for, or that there are no errors in the accounting record of the operations.
4) How can your accounting software make it easier for you to use the general ledger?
The review or scoring of the majors can be done in different ways:
Directly in the accounting programs that facilitate it.
Exporting them to a sheet.
Printing them out and manually punching the operations.
Each accountant uses the technique that is most comfortable for them, but the use of accounting programs such as Sage 50 greatly facilitates analysis directly from the general ledger program itself.
Sage 50 makes it easy to navigate through the general ledger by allowing easy access to the accounting entries made. In addition, it can be sorted in different ways and has different analysis tools. It also facilitates exporting to different formats such as Excel, PDF and CSV.