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A general ledger is a collection of your account charts. A general ledger is a must to keep your business accountant in order. If you have a ledger, you can effectively have a view of how to spend and also help you in keeping your business on track. Though there are many softwares that are available, there are some small business that still go for the traditional general ledger. If you are eager to have a general ledger then there are a few things that you need to know when it comes to how to fill out a ledger book.
The date is that date on which the transactions take place. You can get the date from the accounting source documents. The date is important when you prepare a general ledger.
There should also be a brief description of the transaction that has been done. If you have doubts, put in all the details that you think are important and necessary. Just hold your horses when you do it, take your time. The description depends on how you want to make a general ledger.
You are at the liberty of choosing whatever reference with which you can identify the transaction. For example, some use the reference of the invoice numbers. You can write them so that you don't forget them. The best way which many suggest that you can cross reference between the cash booklet and the document. Reference is something you need to keep when you make a general ledger.
Income and Expenses
This column is the most important one when you work on how to fill out a ledger book. It is very simple. Just insert the values of the transaction in the right columns. Try making ‘Money IN’ and ‘Money OUT ‘ columns.
Now that you know what all u need when you make a general ledger, let's take a look at how it is filled.
The cash receipt journals are the one’s where we can track the transactions where the business receives the cash. But there is a thumb rule for it. All the entries that you put in here are to be the balanced one’s. It can be written down as follows-
Here, the cash account is credited by $4000, which shows the credited cash. The further columns show the break up of the cash received. The sales account got credited due to increase in the sales. The capital account is increased by another $2500 as the owner put in more cash. These entries are to be made when you make a general ledger.
The cash disbursement keeps track of the cash sent out. For example, you can refer to this
It is with the help of these points that you can get to know how to prepare a general ledger.
The above points will be of great use to you if you have questions on how to fill out a ledger book. ATS Accounting can be of great help when you make a general ledger.