POST TRANSACTIONS (PT), PREPARE TRIAL BALANCE (PTB)

PREPARE FINANCIAL REPORTS (PFR), REVIEW INTERNAL CONTORL SYSTEM (RICS)

Trainer: Miss Sweetzel A. Precinio

Qualification Title: Bookkeeping (BKP) NC Level: III Total Training Hours: 292
Name of TVI: Angelita V. Del Mundo Foundation (AVM Foundation) Inc.
Competencies to be Achieved Post Transactions
and Learning Outcomes LO1 Prepare ledger
LO2 Transfer journal entries
LO3 Summarize ledger
Learning Activities/ Tasks 1. Ledger for the list of asset, liability, and equity account titles are prepared in accordance with
the Chart of Accounts
2. Ledger for the list of income and expense account titles are prepared in accordance with the
Chart of Accounts
Training Period / Duration Prelim Period
Training Method Blended Learning (Online & Modular - Print)
Method of Assessment Written test, Practical/performance test & Interview
References CBLM in Bookkeeping NC III & Tesda Training Regulations - TR

INFORMATION SHEET 2.2.-2

ACCOUNTING BOOK – LEDGER

General Ledger
The ledger refers to the accounting book in which the accounts and their related amounts as recorded in the journal are posted periodically. The
ledger is also called the ‘book of final entry’ because all the balances in the ledger are used in the preparation of financial statements. This is
also referred to as the T-Account because the basic form of a ledger is like the letter ‘T’.

The general ledger (commonly referred by accounting professionals as GL) is a grouping of all accounts used in the preparation of financial
statements. The GL is a controlling account because it summarizes all the activities that have taken place as recorded in its subsidiary ledger.

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The format of a general ledger is shown below:
General Ledger
Account: Account No.:
Date Item Ref Debit Credit Balance

The Use of General Ledger

A ledger is a means of accumulating in one place all the information about changes in an asset, liability, equity, income, and expense accounts.
A sample of the general ledger is shown below:

A general ledger is often called a T-Account because of its resemblance to the letter T. A T-Account is a simplified form of general ledger. A
sample of a T-account is shown below:

Account Title (Ex. CASH)

Left Side or Right Side or

Debit Side Credit Side

Two Kinds of Ledger

Recall that the accounts used by a business are kept on separate pages or cards in a book or file called a ledger. In a computerized accounting
system, the electronic files containing the accounts are still referred to as the ledger, or the ledger accounts. In either system the ledger is often
called a general ledger. The general ledger is a permanent record organized by account number.

Recording of financial information is books of account as per standard accounting principle. Both ledgers are used to record a financial
transaction. The general ledger is the principal set of accounts where all financial transactions are recorded. General ledger contain all debit and
credit entries of transaction and entry for same is done in different account mainly there are five types of accounts assets, liabilities, equity,
income, and expense.

A subsidiary ledger is the subset of the general ledger in the accounting it is not possible to record all transactions in general ledger hence
transactions are recorded in sub ledger in a different account and their total sum is reflected in general ledger. Ledger helps in the understanding
of the financial of business and helps in the analysis of transactions.

A subsidiary ledger is a group of similar accounts whose combined balances equal the balance in a specific general ledger account. The general
ledger account that summarizes a subsidiary ledger's account balances is called a control account or master account. For example, an accounts
receivable subsidiary ledger (customers' subsidiary ledger) includes a separate account for each customer who makes credit purchases. The
combined balance of every account in this subsidiary ledger equals the balance of accounts receivable in the general ledger. Posting a debit or
credit to a subsidiary ledger account and also to a general ledger control account does not violate the rule that total debit and credit entries must
balance because subsidiary ledger accounts are not part of the general ledger; they are supplemental accounts that provide the detail to support
the balance in a control account.

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 The accounts receivable subsidiary ledger is essential to most
businesses. Companies may have hundreds or even thousands
of customers who purchase items on credit, who make one or
more payments for those items, and who sometimes return items
or purchase additional items before they finish paying for prior
purchases.

Recording all credit purchases, returns, and subsequent payments in a single account would make an individual customer's balance virtually
impossible to calculate because the customer's transactions would be interspersed among thousands of other transactions. But the accounts
receivable subsidiary ledger provides quick access to each customer's balance and account activity.
 
Companies create subsidiary ledgers whenever they need to monitor the individual components of a controlling general ledger account. In
addition to the accounts receivable subsidiary ledger, companies often use an accounts payable subsidiary ledger (creditors' subsidiary ledger),
which has separate accounts for each creditor, an inventory subsidiary ledger, which has separate accounts for each product, and a property,
plant, and equipment subsidiary ledger, which has separate accounts for each long lived asset.

A subsidiary ledger can be set up for virtually any general ledger account.  However, they are usually only created for areas in which there are
high transaction volumes, which limits their use to a few areas.

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Examples of subsidiary ledgers are:
 
1. Accounts Receivable Subsidiary Ledger is a record of all transactions data of individual customers. A control account for this type of
subsidiary ledgers is Trade Accounts Receivable.

2. Accounts Payable Subsidiary Ledger is a record of all transactions data of individual creditors. A control account for this type of
subsidiary ledgers is Trade Accounts Payable.

3. Fixed Asset Subsidiary Ledger is a record of all transaction data for individual fixed assets. This subsidiary ledger may have several
control accounts eg. Fixed Assets – Buildings)

4. Inventory Subsidiary Ledger accounts contains separate sets of columns for purchases, sales and the account balance