Everything about accounting ledgers

A ledger is a complete record of all accounts used in accounting or personal finance. People usually refer to the ledgers bookkeeping as the general ledger, and the accountant or accountant uses it along with the accounting journal. The journal is a daily record of financial transactions, and the general ledger differs in that the accountant registers transactions by account names. Typically, general accounting ledgers have five classifications: assets, expenses, liabilities, equity, and revenue.

What is a Ledger Account?

A ledger account is any account that is included in bookkeeping ledgers. 

Opening a bank account balance is based on the initial balance on the bank statement, which simultaneously reflects the financial condition at the end of the previous year and confirms the availability of funds in the account.

For each balance item, a ledger account is created in the general ledger. There is a certain degree of freedom in the number of accounts opened.

How to use bookkeeping ledgers

According to the instructions for the use of accounting ledgers in enterprises, the debit and credit amounts in each reporting period should be equal in the ledger account. Besides, the balances for credit and debit accounts each month must also have the same values. 

The document is required for reporting to employees of the inspection authorities, who almost always require it for a review. Also, it is easy to learn from the ledger data about typical errors, which are difficult to identify when checking, for example, accounting statements.

The form of free bookkeeping ledgers used in the enterprise is approved directly by the management of the organization and after the publication of the order becomes mandatory for use by accountants. Keep records in this book in the following order: 

  1. At the beginning of the work with ledgers accounting, the accountant must enter the document names and numbers of accounts, sub-accounts used by the company for settlements with other organizations and individuals, and recorded in the company’s accounting policy. 
  2. After entering the data in accounting ledgers, you must fill in the “Debit” and “Credit” columns in the ledger account balances section at the beginning of the next reporting period.
  3. The last stage of the work is to calculate the total amount of credit and debt at the end of the reporting period, enter data in the appropriate columns and check whether they are filled in correctly (the amounts for debit and credit accounts must have the same values). 

It should be noted that in organizations that have licensed 1C accounting packages for accounting ledgers, the main books are formed automatically. Hence, there is no need for a manual accounting of spending and receiving financial funds in such companies.

If changes have been made to the data in the accounting ledgers, they must be certified with the signatures of the persons responsible for maintaining, with initials, and a transcript of the signature. When making an electronic document, it must be certified by the electronic signature of the company’s manager or accountant. In addition to data on current accounts, the journal must contain the following information:

  • document name;
  • name of the organization that compiles it;
  • the year for which the ledger is compiled;
  • the number of accounting objects measured in monetary terms;
  • positions of persons responsible for maintaining reports by regulatory documents;

Also, there should be signatures of responsible persons with the data necessary for their unambiguous identification (decryption of the signature, initials, and other details). Now, you know an answer to “What is ledgers in accounting?”.