Overview
The ledger is a permanent summary of all amounts entered in supporting journals which list individual transactions by date. Every transaction flows from a journal to one or more ledgers. A company's financial statements are generated from summary totals in the ledgers.
Ledgers include:
- Sales ledger, records accounts receivable. This ledger consists of the financial transactions made by customers to the company.
- Purchase ledger records money spent for purchasing by the company.
- General ledger representing the 5 main account types: assets, liabilities, income, expenses, and equity.
For every debit recorded in a ledger, there must be a corresponding credit so that the debits equal the credits in the grand totals.
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