What Is a Ledger Account?

The ledger account contains a listing of business transaction records. It is a separate record a ledger that is assigned to a specific asset, liability, equity item, revenue type, or expense type.

Here are the primary general ledger accounts:

  • Asset accounts
  • Liability accounts
  • Stockholders’ equity accounts
  • Revenue accounts
  • Expense accounts
  • Revenue and loss accounts

Transactions are recorded throughout the year by debiting and crediting ledger accounts. The transactions are caused by normal business activities such as billing customers or through adjusting entries.

How to write to a Ledger?

The Alliance Business Suite Accounting Module uses the double-entry bookkeeping method. So writing to a ledger means recording transactions into it. Each transaction is recorded into at least two ledger accounts. The entries have debit as well as credit transactions and are posted in two columns.

The Alliance Business Suite Accounting Module exposes a general ledger to each business tenant in the system. This ledger employs the double-entry bookkeeping method, which means that each financial transaction affects at least two general ledger accounts and each entry has a debit and a credit transaction. Double-entry transactions are posted in two columns, with debit postings on the left and credit entries on the right, and the total of all debit and credit entries must balance before recording the transaction.

Ledgers break up the financial information from the journals into specific accounts such as Cash, Accounts Receivable, and Sales, on their own sheets. This allows you to see the details of all your transactions.

What’s the Difference Between a Journal and a Ledger?

The journal and ledger both play an important role in the accounting process. The business transactions are primarily recorded in the journal and thereafter posted into the ledger under respective heads. While many financial transactions are posted in both the journal and ledger, there are significant differences in the purpose and function of each of these accounting books.


The financial transactions are summarized and recorded as per the double-entry system in a journal. It’s also known as the primary book of accounting or the book of original entry.

The ledger, on the other hand, is known as the principal book of accounting. It records the information from the journal in the “T” format. It is used to create the trial balance which is also the source of the financial statements such as the income statement and the balance sheet


The process of recording transactions in a journal is called journalizing while the process of transferring the entries from the journal to the ledger is known as posting.

The transactions in a journal are recorded in chronological order making it easy to identify the transactions are associated with a given business day, week, or another billing period. By contrast, the arrangement of entries within a ledger has more to do with grouping like transactions together into specific accounts for purposes of assessing the data for internal financial and accounting purposes.


The format of a journal is simple. It includes the transaction date, particulars of the transaction, folio number, debit amount, and credit amount. There is no scope for balancing in a journal.

The format of a journal:

Transaction dateAccount title and detailsLedger folio numberAmt.Amt.

The ledger uses the “T” format where the date, particulars, and amount are recorded on each side.

The format of a ledger:

DateParticularsFolio NumberAmountDateParticularsFolio NumberAmount
Transaction dateAccount nameAmt.Transaction dateAccount nameAmt.

Unlike a journal, some ledger accounts start with an opening balance that is the closing balance of the previous year. Also, in the end, the ledger amounts should be balanced.

Preparing a ledger is important as it serves as a master document for all your financial transactions. Since it reports revenue and expenses in real-time, it can help you stay on top of your spending. The general ledger also helps you compile a trial balance, spot unusual transactions, and aids in the creation of financial statements.