What are ledger accounts?

The definition of accounting accounts are the operating instruments where the assets (accounts receivable), liabilities (accounts left to pay) and the capital of a company, also known as cash flow. This data shows the ups and downs of a company.

Among the methods for recording data are the following:

  • Bound books, where one sheet is used for each account.
  • Mobile sheet book, where for example a hook folder is used, where sheets can be added depending on the transactions.
  • Loose cards for accounts where credit machines must be used accounting.
  • System of cards or tapes for computers, used above all among large companies, where there is a high volume of operations.

Characteristics of accounting accounts

Regardless of the method used, all accounting accounts have a series of common characteristics:

  1. At the top must be the name and a code to differentiate it from another account that clearly shows the content, such as cash, bank, furniture, cash to be paid, vehicle, etc.
  2. The date column includes the day, month and year in which the operation is carried out.
  3. The description column should briefly but clearly state the reason that caused the account to be decreased or increased. An example may be the payment of salaries, the collection from the client or cash sale.
  4. In the 'Debt' column, the amounts in monetary terms that imply a charge or debit for the account are completed.
  5. In the 'Credit', for its part, the amounts that represent credit or credit for the account are filled in.
  6. In the part of the balance, the money that remains in the account after each payment or charge will go.
  7. In the column of folio a reference is placed where the accounting book where the transaction being recorded comes from.

Template to record accounting entries

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