The sales ledger

A sales ledger is a detailed itemization of sales made, presented in date sequence. It may also contain credits issued that reduce the amount of sales, perhaps for products returned by customers. The information in a sales ledger can be quite detailed, including such items as the sale date, invoice number, customer name, items sold, sale amounts, freight charged, sales taxes, value-added tax, and more.

The information in a sales ledger is summarized periodically and the aggregated amounts are then posted to the sales accounts in the general ledger. This posting can be as infrequent as the end of each month (as part of the month-end closing process) or even every day. The detail level information in the sales ledger is kept separate from the general ledger, in order to keep the general ledger from being overwhelmed with too much information.

The following are examples of how a sales ledger can be used:

  • Financial statements. The sales ledger is the ultimate source document for the sales figure that appears at the top of the income statement.
  • Research. If someone wants to research a sales issue, they typically begin with a high-level analysis in the general ledger, such as a trend line analysis, and then switch to the sales ledger to determine the details of exactly what happened.
  • Auditing. An auditor will likely want to ensure that the total sales amount reported in a company's financial statements is correct, and will investigate by examining a selection of the invoices listed in the sales ledger, which comprise that sales figure.

Originally, the sales ledger was manually maintained, with postings to the general ledger also being completed by hand. With the advent of computerized accounting systems, it is not always apparent that a sales ledger exists, since a user simply searches for a specific invoice number, date range, or amount, and never realizes that he or she is accessing what used to be called the sales ledger. Thus, the term is less commonly used than had previously been the case.

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