Ledger cash definition
/What is Ledger Cash?
Ledger cash is the net amount of cash when all of an organization's cash accounts have been combined. This is the amount that appears in the cash line item within the assets section of a firm's balance sheet (as noted in the following exhibit). Depending on the size of a business, the ledger cash balance may be compiled from a large number of cash accounts, possibly denominated in several currencies. The actual amount of cash on hand can vary from the ledger cash amount if a business does not conduct bank reconciliations on a regular basis.
Terms Similar to Ledger Cash
Ledger cash is also known as book cash.
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Example of Ledger Cash
The accounting department at a small software development company maintains a detailed general ledger to track all financial activity, including the cash account. On March 1, the company begins the day with a ledger cash balance of $75,000. Throughout the day, several transactions affect this balance. The company receives a $15,000 payment from a client for a completed software project, which is recorded as a debit to cash and a credit to accounts receivable. Simultaneously, the company pays $8,000 in salaries and $3,000 for office rent, each entered as a credit to cash and a debit to the respective expense accounts. The resulting ledger cash balance is now $79,000 (calculated as $75,000 + $15,000 – $8,000 – $3,000). This ledger cash figure represents the book balance of available funds before considering any bank-related adjustments, such as outstanding checks or deposits in transit.