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or other uses, see Ledger (disambiguation).

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General ledger.

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

1 Overview

2 Etymology

3 See also

4 Notes

5 References

6 Further reading

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:

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.

Etymology[edit]

Ledger from 1828

The term ledger stems from the English dialect forms liggen or leggen, meaning to lie or lay
(Dutch: liggen of leggen, German: liegen oder legen); in sense it is adapted from the Dutch
substantive legger, properly a book laying or remaining regularly in one place. Originally, a ledger
was a large volume of scripture or service book kept in one place in church and openly
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."
In application of this original meaning the commercial usage of the term is for the "principal book
of account" in a business house.

See also[edit]

Bookkeeping

Debits and credits

Specialized journals

Notes[edit]
1.

Jump up^ From the English dialect forms liggen or leggen, to lie
or lay; in sense adapted from the Dutch substantive legger

2.

Jump up^ Haber, Jeffry (2004). Accounting Demystified. New


York: AMACOM. p. 15. ISBN 0-8144-0790-0.

References[edit]

This article incorporates text from a publication now in


the public domain: Chisholm, Hugh, ed. (1911).
"Ledger". Encyclopdia Britannica (11th ed.). Cambridge
University Press.

Further reading[edit]
Wikimedia Commons has
media related to Ledgers.
Look up ledger in
Wiktionary, the free
dictionary.

Business Owner's Toolkit: General Ledger. (n.d.). Business


Owner's Toolkit. Retrieved March 29, 2011,
fromhttp://www.toolkit.com/small_business_guide/sbg.aspx?
nid=P06_1450

General Ledger Entries. (n.d.). NetMBA Business Knowledge


Center. Retrieved March 30, 2011,
fromhttp://www.netmba.com/accounting/fin/process/ledger/

General Ledger: Small Business Accounting . (n.d.). Starting a


Small Business - BusinessTown Small Business Assistance.
Retrieved March 31, 2011,
from http://www.businesstown.com/accounting/basicgeneral.asp

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DEFINITION of 'General Ledger'

A company's main accounting records. A general ledger is a complete record of


financial transactions over the life of a company. The ledger holds account
information that is needed to prepare financial statements, and includes accounts
for assets, liabilities, owners' equity, revenues and expenses.
A general ledger is typically used by businesses that employ the double-entry
bookkeeping method - where each financial transaction is posted twice, as both
a debit and a credit, and where each account has two columns. Because a debit
in one account is offset by a credit in a different account, the sum of all debits will
be equal to the sum of all credits.

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EFINITION OF 'LEDGER BALANCE'


The balance of a customer account as shown on the bank statement.
The ledger balance is found by subtracting the total number of debits from the
total number of credits for a given accounting period. The ledger balance is
used solely in the reconciliation of book balances.

BREAKING DOWN 'LEDGER BALANCE'


The ledger balance should not be confused with the customer's available
balance, which is the amount of funds available for withdrawal. The ledger
balance includes any and all checks outstanding that have not yet cleared the
account. This is partly why it differs from the available balance.
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