Ainsworth & Co, Chartered Accountants and Business Advisors.

The Accounting Ledgers

Our Guide to the Accounting Ledgers, and their role in Bookkeeping:

Nominal Ledger (General Ledger)
Sales Ledger (Accounts Receivable)
Purchase Ledger (Accounts Payable)

Business Accounting and Bookkeeping is done in Accounting Ledgers, and Debits and Credits.

Even though the words and terminology changes, these principles are the basis of modern software.

“Ledger” is an old-fashioned word for an accounting book or record.

In Accounting Software, the Nominal (or General) Ledger is often called the Chart of Accounts.

Although the word “Ledger” is still used in training, the word is rarely used in modern software. However, the principles of “Ledger” accounting appear throughout all modern software, even though different words are used.

There are three main ledgers in accounting, and these all appear in modern software, and always will: They are the foundation and basis of all "double entry" bookkeeping.

The ledgers are now known by a variety of names mainly because of different English-speaking countries using different words, and also the many suppliers in accounting software has led to new terminology, even though the basics remain the same.

The three ledgers are:
General (or Nominal) Ledger
Sales Ledger (Accounts Receivable)
Purchase Ledger (Accounts Payable)


As with all Accounts and Ledgers, the transactions are recorded in Debits and Credits.

To make the accounting records complete, the Sales Ledger and Purchase Ledger each have to be 'represented' in the General Ledger, even though they themselves are separate ledgers.

This is achieved by the concept of Control Accounts. On the General Ledger there will be a Control Account each for the Sales Ledger and Purchase Ledger.

Every time a transaction is recorded in the Sales Ledger (eg. Sales Invoice or Money Received), an identical record is kept in the Sales Ledger Control Account in the General Ledger. This is the way that the General Ledger stays in balance.

Every time a transaction is recorded in the Purchase Ledger (eg. Purchase Invoice or Payment Made) it is also recorded in the Purchase Ledger Control Account in the General Ledger. This is the way that the General Ledger stays in balance.



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