Ledger

From Wikipedia, the free encyclopedia - View original article

 
Jump to: navigation, search
General ledger.

A ledger[1] is the principal book or computer file for recording and totaling monetary transactions by account, with debits and credits in separate columns and a beginning balance and ending balance for each account.

Overview[edit]

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.[2]

Ledgers include:

For every debit recorded in a ledger, there must be a corresponding credit so that the debits equal the credits in the grand totals.

Origin of the term ledger[edit]

Ledger from 1828

Originally, a ledger was a large volume of scripture/service book kept in one place in church and accessible. According to Charles Wriothesley's Chronicle (1538), "The curates should provide a booke of the bible in Englishe, of the largest volume, to be a ledger in the same church for the parishioners to read on."

It is an application of this original meaning that is found in the commercial usage of the term for the principal book of account in a business house.

See also[edit]

Notes[edit]

  1. ^ From the English dialect forms liggen or leggen, to lie or lay; in sense adapted from the Dutch substantive legger)
  2. ^ Haber, Jeffry (2004). Accounting Demystified. New York: AMACOM. p. 15. ISBN 0-8144-0790-0. 

References[edit]

Further reading[edit]