The first step in the process of recording transactions is to journal, and the second step is to place the transactions in the ledger. Ledger is known as the ‘head or head’ book. In the general ledger, financial information is classified according to its nature and relevance.
The education that records the transactions in a place that relates to a particular topic is called account. The book, which contains all accounts, is known as the ledger, and the procedure for recording accounts is called bookkeeping.
The general ledger is the most important account book and is the destination of the entries made in the journal or subdivided journals. It is a collection of all three account types – Personal, Real and Nominal. If you face questions like:
– How much a particular customer owes you?
– What is the amount you have to pay to any of your suppliers?
– What is the amount of goods you have purchased in a specific period?
– How much sales have you had in the last three months?
– What have been your expenses for, for example, labor during the period?
Then the faster and easier way to find out the relevant information is to go to your ledger, find out the balance of the customer’s AC or the supplier’s AC or buy AC or Sales AC or Pay AC.
How to Write Ledger
In the general ledger we keep accounts. Each account is assigned one or more pages depending on the requirement. Ledger is usually regulated in one of the following two alternatives. The first alternative is followed in cases where the balance is required after each transaction, e.g. Banks.
Another alternative is followed in cases where balance is only required to be ascertained periodically, e.g. After a month or quarterly. In your accounting and accounting study, T-form accounting will be used (alternative-two).
The transactions are entered in ledger accounts in order of dates. Each entry must be dated, which should appear in the column intended for date. This is the first column to the left of each page of the account.
Note the relevant amount on the left side of the account, which according to the journal is to be debited, and record the amount on the right side of the account, as per Journal must be credited (use ‘amount’ columns’ for this purpose). In the ledger account, each entry begins on the debit (left) side with the word “On” and one on the credit (right) side with the word “On”. The ‘information’ column refers to the other account involved for cross-referencing. In the ‘folio column’, the page is entered in the journal (or the page in the relevant subdivided diary) from which the entry was submitted, and in the folio column in journal, the page number of the main number is entered as the relevant account is displayed.
In fact, by following the above procedure of recording the entries in the general ledger, this account constitutes the account that receives the benefit in the form of cash or goods, receives the debits and the account transferred, ie. giving away the benefit receives the credits.