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1 LEDGER

1. DEFENITION A ledger contains summarized financial information that is classified by assignment to a specific account number using a Chart of Accounts. A ledger can be a physical book or also refer to software or spreadsheets where the financial information is recorded. A General Ledger contains a summary of all the information recorded in subsidiary ledgers, which are ledgers that break down and show more information according to classifications. Financial information for ledgers is taken from the company's journal. Also Known As: Book of Final Entry 2. DEFENITION LEDGER is a book of accounts in which data from transactions recorded in journals are posted and thereby classified and summarized. The ledger is typically divided up into (traditionally physical separate books): A. Purchases/Creditors Ledger is the subsidiary ledger in which creditors accounts are recorded; also known as the bought ledger. Each creditors account is credited with purchases and debited with cash paid, discounts received and returns outward. The detail in the creditors ledger is summarized in the creditors ledger control account kept in the general ledger; B.Sales/Debtors Ledger is the subsidiary ledger in which debtors accounts are recorded; also known as the sold ledger. Each debtors account is debited with sales and credited with cash received, discounts allowed and returns inward.

2 The detail in the debtors ledger is summarized in the debtors ledger control account kept in the general ledger; C. General/Impersonal Ledger is a book of final entry summarizing all of a companies financial transactions, through offsetting debit and credit accounts, e.g. liability, reserve, capital, income and expense accounts; and D. Private Ledger is confidential and records items such as capital, loans, mortgages, directors salaries and awards, etc. 3. DEFENITION An accounting book of final entry where transactions are listed in separate accounts. 4. DEFENITION A book of final entry summarizing all of a company's financial transactions, through offsetting debit and credit accounts. Definition of 'Trial Balance' A bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit columns. A company prepares a trial balance periodically, usually at the end of every reporting period. The general purpose of producing a trial balance is to ensure the entries in a company's bookkeeping system are mathematically correct. Definition of 'Generally Accepted Accounting Principles - GAAP' The common set of accounting principles, standards and procedures that companies use to compile their financial statements. GAAP are a combination of authoritative standards (set by policy boards) and simply the commonly accepted ways of recording and reporting accounting information.