3. Ledger Accounts

A ledger account is a record of financial transactions that relate to a specific asset, liability, equity, revenue, or expense. Ledger accounts are used to record the financial transactions of a company and are organized into categories, such as assets, liabilities, equity, revenue, and expenses.

Each ledger account has a name and a balance. The balance of a ledger account is the sum of all the debits and credits that have been recorded in the account. For example, the balance of a company’s cash ledger account would be the total of all the cash that has been received and spent by the company.

Ledger accounts are used to record the changes in a company’s financial position over time. They provide a record of a company’s financial activities and are used to create financial statements, such as the balance sheet and income statement.

Here is an example of a ledger account:

Account Name: Cash

In this example, the company has a cash ledger account with an opening balance of $0. On January 2, the company received a payment from a customer, which is recorded as a debit in the cash account. On January 3 and 4, the company paid rent and utilities, which are recorded as credits in the cash account. The balance of the cash account at the end of the month is $25. Ledger accounts are an important part of the accounting process and are used to track the financial transactions of a business. They provide a record of a company’s financial position and are used to create