Ledgers Overview

🗒️ Ledgers Overview

📖 What is a Ledger?

A ledger is the principal book or file for recording and totaling economic transactions measured in terms of a monetary unit of account. It tracks transactions with debits and credits in separate columns and shows a beginning and ending balance for each account. Ledgers provide insight into the financial position of an organization and are essential for creating financial reports such as balance sheets and income statements. 💰📊

📚 Types of Ledgers

🗂️ Ledger Types

Ledger Type	Description
📘 General Ledger (GL)	The General Ledger contains all the individual accounts of an organization and summarizes all transactions that impact the financial statements. 📈
📒 Subsidiary Ledger	The Subsidiary Ledger contains detailed individual entries related to specific categories like customer accounts (Accounts Receivable) or vendor accounts (Accounts Payable). 🧾

🔍 Ledger Explanation

📊 General Ledger Accounts

Account Type	Purpose
💼 Asset Accounts	Record all assets owned by the company, such as cash, inventory, and equipment. 🏢
💳 Liability Accounts	Record all obligations the company owes to external parties, like loans and payables. 📉
👥 Equity Accounts	Record the owners' claims against the assets of the company. 🏦
💵 Revenue Accounts	Record all income earned by the company through its business activities. 📈
💸 Expense Accounts	Record all costs incurred by the company during its business operations. 🏷️

📑 Subsidiary Ledger

The Subsidiary Ledger contains detailed transactions for specific accounts that would be too cumbersome to record in the General Ledger. Each subsidiary ledger is linked to a control account in the General Ledger. 🔗

📋 Subsidiary Ledger Types

Subsidiary Ledger Type	Description
📥 Accounts Receivable Ledger	Contains detailed information about customer invoices and payments. 💳
📤 Accounts Payable Ledger	Contains detailed information about the company's obligations to pay suppliers and vendors. 🧾
📦 Inventory Ledger	Tracks all inventory-related transactions providing detailed entries for each item. 📊