#Bank account general ledger manual
#Bank account general ledger trial

Liability ledger: All accounts pertaining to debts or obligations of the organization will be posted here.Cash, Bank, Debtors, Machinery, Furniture accounts and the like will fall under this category. Asset ledger: All accounts pertaining to assets will be posted in this ledger.Capital ledger: All accounts pertaining to Capital introduced/drawings will fall under this ledger.Sales, interest received, Discounts received accounts will fall under this category. Income ledgers: All income accrued/earned will be posted in this account.Purchase Account, Rent Account, Electricity account, Maintenance Account and the like will all fall under this category. Expense Ledgers: All expenses incurred will be posted in this ledger.This classification facilitates the preparation of financial statements. General ledgers are classified according to their nature.

#Bank account general ledger trial

These ledgers are then totalled at period end to form a Trial balance. Similarly as and when transactions are entered into, the resultant entries are categorized and placed in ledgers. We can analyze the expenses with a lot of ease. But this task will be simplified if we categorize the bills according to the relevant expenses and file it accordingly from the beginning of the year.įor example all mobile bills in one file, all credit card bills in one file and so on. We have filed all the bills in a single file, then we will have to find every bill month wise and then total that head of expense and then compare the various expenses. Over a period of one year, we may want to analyze our expenses. Let us simplify this concept with the following illustration: We pay monthly bills for credit cards, mobile phones, electricity, etc. Simplified meaning of General Ledger and Process

#Bank account general ledger manual

Posting of entry into respective ledgers takes place on the real-time basis and no manual intervention is required. With automation playing its role, this cumbersome process of posting has been simplified. Posting of debit and credit part of entries will be carried on for every journal entry resulting from transactions. Similarly, in Sales account, the entry will reflect as follows 100 per kilo) Now this entry will be posted to the respective ledgers in the following manner (Being 20 kilos strawberry sold to ABC at Rs. 100 per kilo to its buyer for cash on 8th August. These entries are then posted in respective accounts called ledgers.Įxamples: Let us assume, an organization Apple Ltd trades in fruits. Every transaction leads to two entries as per the double entry system of bookkeeping. An organization has multiple transactions in a day. General Ledger in simple language is grouping of transactions of similar nature.