What is a Ledger?

A ledger is a book or database in which double-entry accounting transactions are stored and summarized. The information stored in a ledger comes from a source document, such as cancelled checks, credit memos, deposit slips, expense reports, invoices, material requisition forms, purchase orders, time cards, and sales receipts.

A ledger is the central repository of information needed to construct the financial statements of an organization. It is also a key source of information for auditors. A ledger is sometimes referred to as the general ledger, which is the aggregate set of records covering all accounts for which a business stores transactional information.

Structure of a Ledger

In a manual bookkeeping system, each page in a ledger is typically assigned to a single account; pages are added if the number of recorded transactions for an account exceeds the assigned page. In a computerized environment, a ledger is simply a file containing the same information that would have been found on a ledger page in a manual accounting system.

Example of a Ledger

An example of a ledger is the cash ledger, which appears in the following exhibit. Debits in the ledger show incoming cash, while credits reflect outgoing cash.