What are Ledgers?

Ledgers are books that hold a collection of accounts

There are three main ledgers:

  • Sales Ledger
  • Purchases Ledger
  • General Ledger

What is the Sales Ledger?

The sales ledger will show the accounts of all trade receivables(people who owe you money ) for credit sales separately.

Typically on the debit side there will be:

  • Sales made by the business
  • Interest that has been charged
  • Dishonored cheques

Typically on the credit side there will be:

  • Cash received by the person
  • Discount that has been allowed by the business
  • Sales that have been returned
  • Bad debts

What is the Purchases Ledger?

The Purchase ledger will show the accounts of all trade payable(people who you owe money ) for credit purchases separately.

Typically on the debit side there will be:

  • Cash payed by the business
  • Discount received
  • Purchases returned

Typically on the credit side there will be:

  • Purchases made by the business
  • Interest charged

What is the General Ledger?

Accounts that do not go into the other two ledgers will go in the general ledger.

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