LEDGER

a collective record of individual accounts used by

a business.
 used to sort all entries made in the journal in
chronological order and to group all transactions
that affect individual accounts in order to
facilitate the preparation of financial statements.
 ADVANTAGES OF USING A LEDGER

1. It provides detailed information about revenues

and expenses in one place, hence results of
business operations can be easily determined.
 ADVANTAGES OF USING A LEDGER

2. It provides detailed information about assets,

liabilities, and owner’s equity of the business,
thus, the business’s financial position can easily
be known.
 ADVANTAGES OF USING A LEDGER

3. It assists management in monitoring business

performance through information in individual
ledger accounts.
4. It serves as tool for auditors to track the flow of
business transactions for a given period of time.
 • GENERAL
TWO TYPES LEDGER
OF LEDGERS • SUBSIDIARY
LEDGER
 GENERAL LEDGER

 used to accumulate and classify individual

transactions from the journal
 it divides the account into two sides: the left side
for debit information and the right side for credit
information
 GENERAL LEDGER

 A typical general ledger includes the following

information:
a. account title
b. account number
c. date of the transaction
 GENERAL LEDGER

d. items column
e. reference column
f. debit money column
g. credit money column
GENERAL LEDGER FORMAT

ACCOUNT TITLE No.

Date Items Ref. Dr Date Items Ref. Cr
 SUBSIDIARY LEDGER

 used to provide detailed information about a

specific ledger account
 it follows a running-balanced type of ledger
because it adds a column to determine the account
balance after posting each transaction
 SUBSIDIARY LEDGER

 by just looking at the subsidiary ledger, the

business knows at a glance how much it owes
others and how much others owe to it
 normally set up for Accounts Receivable and
Accounts Payable
 ACCOUNTS RECEIVABLE
SUBSIDIARY LEDGER
 also known as customer subsidiary ledger
 gives more detailed information on the
transactions of each credit customer and provides
information on which customers owe money to the
business and how much
 ACCOUNTS PAYABLE
SUBSIDIARY LEDGER
 also known as the supplier subsidiary ledger
 gives details on the business’s transactions with
each account supplier and provides information on
which suppliers the business owes money and how
much
 SUBSIDIARY LEDGER

accounts receivable and accounts payable are

therefore control or controlling accounts because
these are general ledger accounts supported by
detailed information in the subsidiary ledger
 SUBSIDIARY LEDGER

 A typical subsidiary ledger includes the

following information:
a. the related control account
b. name of the customer/supplier
c. page number
 SUBSIDIARY LEDGER

d. date of the transaction

e. items column
f. reference column
g. debit money column
h. credit money column
i. account balance
SUBSIDIARY LEDGER
FORMAT
ACCOUNTS PAYABLE – A AP1
Date Items Ref. Dr Cr Balance