Ledger Account is a journal in which a company maintains the data of all
the transactions and financial statement. Company’s general ledger
account is organized under the general ledger with the balance sheet
classified in multiple accounts like assets, Accounts receivable, account
payable, stockholders, liabilities, equities, revenues, taxes, expenses,
profit, loss, funds, loans, bonds, stocks, salaries, wages, etc
General Ledger Accounts Meaning and Definition
Ledger is a book that contains the accounts. Any financial statement
related to the financial position of the company emerges only from the
accounts. Thus, this ledger is known as the principal book. So, the result
of all this is that it is necessary to relate all the information for any
account available is from the ledger. This book of accounts is the most
important book for any business and that is why it is known as the king of
all books. Also, the ledger book is also known as the book of the final
entry. The Ledger account is thought of the book that has all
the accounting information of the company.
“A ledger is also known as the principal book of accounts and it forms a permanent
record of all business transactions.”
A ledger account contains many things. It Include dates, particulars,
amount,
In ledger accounts, this specimen is used for writing the entries of the
accounting
Types of Ledger
There are 3 types of Ledgers –
Sales Ledger
Purchase Ledger
General Ledger
1. Sales Ledger – Sales Ledger is a ledger in which the company
maintains the transaction of selling the products, services or cost of
goods sold to customers. This ledger gives the idea of sales revenue
and income statement.
2. Purchase Ledger – Purchase Ledger is a ledger in which the
company organizes the transaction of purchasing the services,
products, or goods from other businesses. It gives the visibility of
how much amount the company paid to other businesses.
“Purchase Ledger or Creditors’ Ledger ”
3. General Ledger – General Ledger is divided into two types –
Nominal Ledger and Private Ledger. Nominal ledger gives
information on expenses, income, depreciation, insurance, etc. And
Private ledger gives private information like salaries, wages,
capitals, etc. Private ledger is not accessible to everyone.
A general ledger or GL is a centralized compilation for all the
ledger accounts of a business. It contains all types of accounts
which can be found in an organization such as assets, liabilities,
capital or equity, revenues, expenses, etc.
Nominal Ledger – As the name suggests it contains all nominal
accounts i.e. expense, losses, incomes and gains. Examples –
Salaries, Sales, Purchases, Returns Inward/Outward, Rent,
Stationery, Insurance, Depreciation, etc.
Private Ledger– Private ledger consists of accounts which
are confidential in nature such as capital, drawings, salaries, etc.
These accounts are only accessible by selected individuals.
Some companies do make separate general, nominal and private ledger.
Ledger Account Examples
Assets
Cash
Land
Accounts receivable
Equipment
Liabilities
Debt
Accounts Payable
Loans
Accrued expenses
Stock
Stockholders Equity
Common Stocks
Retained Earnings
Operative Revenues
Sales
Services Fees
Operating Expenses
Salaries and wages
Office Expenses
Depreciation Expense
Ledger Account Format and Template
Following image shows the format of General Ledger Account –
Following image shows a sample template of General Ledger Account
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