A ledger is the principal book or computer file for recording and totaling monetary transactions by account, with debits and credits in separate columns and a beginning balance and ending balance for each account. The ledger is a permanent summary of all amounts entered in supporting journals

General journal

The general journal is where double entry bookkeeping entries are recorded by debiting one or more accounts and crediting another one or more accounts with the same total amount...

 which list individual transactions by date. Every transaction flows from a journal to one or more ledgers. A company's financial statement

Financial statement

A financial statement is a formal record of the financial activities of a business, person, or other entity. In British English—including United Kingdom company law—a financial statement is often referred to as an account, although the term financial statement is also used, particularly by...

s are generated from summary totals in the ledgers.

Ledgers include:

• Sales ledger, records accounts receivable
  Accounts receivable
  Accounts receivable also known as Debtors, is money owed to a business by its clients and shown on its Balance Sheet as an asset...
  
  . This ledger consists of the financial transactions made by customers to the company.
• Purchase ledger
  Purchase ledger
  A purchase ledger is a system in accountancy by which a business records and monitors its creditors. The purchase ledger contains the individual accounts of suppliers from whom the business has made purchases on credit...
  
   records money spent for purchasing by the company.
• General ledger
  General ledger
  The main accounting record of a business which uses double-entry bookkeeping. It will usually include accounts for such items as current assets, fixed assets, liabilities, revenue and expense items, gains and losses. Each General Ledger is divided into debits and credits sections. The left hand...
  
   representing the 5 main account types: assets, liabilities, income
  Income
  Income is the consumption and savings opportunity gained by an entity within a specified time frame, which is generally expressed in monetary terms. However, for households and individuals, "income is the sum of all the wages, salaries, profits, interests payments, rents and other forms of earnings...
  
  , expenses, and equity
  Equity (finance)
  In accounting and finance, equity is the residual claim or interest of the most junior class of investors in assets, after all liabilities are paid. If liability exceeds assets, negative equity exists...
  
  .

For every debit

Debits and credits

Debit and credit are the two aspects of every financial transaction. Their use and implication is the fundamental concept in the double-entry bookkeeping system, in which every debit transaction must have a corresponding credit transaction and vice versa.Debits and credits are a system of notation...

 recorded in a ledger, there must be a corresponding credit

Debits and credits

Debit and credit are the two aspects of every financial transaction. Their use and implication is the fundamental concept in the double-entry bookkeeping system, in which every debit transaction must have a corresponding credit transaction and vice versa.Debits and credits are a system of notation...

 so that the debits equal the credits in the grand totals.

See also

• Bookkeeping
• Specialized journals
  Specialized journals
  Journals record transactions over a specified time in DATE ORDER using double-entry bookkeeping. Each transaction is also recorded in the ledger, which helps detect transcription errors. All transactions are classified by type into appropriate journals....
  
  
• Debits and credits
  Debits and credits
  Debit and credit are the two aspects of every financial transaction. Their use and implication is the fundamental concept in the double-entry bookkeeping system, in which every debit transaction must have a corresponding credit transaction and vice versa.Debits and credits are a system of notation...
  
  

Origin of the term ledger

Originally, a ledger was a large volume of scripture/service book kept in one place in church and accessible. According to Charles Wriothesley

Charles Wriothesley

Charles Wriothesley was a long-serving officer of arms at the College of Arms in London. He was the last member of a dynasty of heralds that started with his grandfather—Garter Principal King of Arms John Writhe.-Personal life:...

's Chronicle

Chronicle

Generally a chronicle is a historical account of facts and events ranged in chronological order, as in a time line. Typically, equal weight is given for historically important events and local events, the purpose being the recording of events that occurred, seen from the perspective of the...

(1538):
It is an application of this original meaning that is found in the commercial usage of the term for the principal book of account in a business house.