ledger What is it ❓ Entrepreneurs should know

ledger What is it ❓ Entrepreneurs should know

📌 What is Ledger? Why does a business need a ledger?

The ledger is one of the five books an entity should do. Because it is an account that summarizes the past transactions from the journal. by serving to classify and organize them into categories for easy viewing Therefore, it is convenient to prepare financial statements in the future.

📌 There are 2 types of ledger accounts:

1. General ledger

The general ledger is the main account. that collects the balance of all ledger accounts, including the Asset Ledger, Liabilities Ledger, Owner's Equity Ledger, Income Ledger and expense ledger

together with

- day, month, year in which the transaction is recorded

- Information and list of accounts

- Debit amount

- day, month, year in which the transaction is recorded

- Information and list of accounts

- Credit amount

2.Sub-ledger

The sub-ledger account is an account book that shows more details from the general account. which will have a sub-type account payable and sub-category accounts receivable that shows all item details and individual information

together with

- day, month, year in which the transaction is recorded

- Information and list of accounts

- Account page of the entry notebook

- Debit amount

- Credit amount

📌Benefits of Ledger

allowing us to see an increase or the reduction of each account at all Accountants also use “Ledger” to check for unusual or error-prone entries. which the accountant will use to check with the actual documents used to record the accounts

📌 Accountant's note-taking tool

There are many types of accountant's record keeping. Starting from a small business Business events will be recorded as a list before. For example, on January 14th, a computer was purchased to use in the office for 30,000 baht.

This type of accountant is called. “Single Entry System” is just writing down the list.

- Makes you not see an overview of how much cash you have now

- How much inventories are left?

If you want to know this information, you need to create a report for only the information you want to know. Sometimes the information is inaccurate. Single accounting systems are often used for smaller businesses such as sole proprietorships.

Therefore, when an accountant wants the recorded information to be verifiable at any time. and get the correct information will also use a note-taking method. "Double Entry System" by taking note of this type will be under the assumption that Business events that occur often reflect "Accounting equation" is always

“Assets = Liabilities + Owner's Equity”

📌 Accounting Equation

Let's explain the "accounting equation" to be easy to understand "Assets = Liabilities + Owner's Equity" Suppose that in our company we have cash of 1,000,000 baht (assets), which this cash may be obtained from bank loans 800,000 baht (liabilities). And it's owner's capital 200,000 baht (owner's equity). So how do business events reflect the accounting equation?

for example Buy a computer to use in the company for 30,000 baht. The owner of the computer shop can pay at the end of next month. This list reflects the accounting equation. It can be described as follows. buy a computer Increased asset value by 30,000 baht, but haven't paid yet, resulting in more debt by 30,000 baht. Write the equation like this.

Computer (assets) 30,000 = Computer shop creditor (liabilities) 30,000

In accordance with the principles of the double accounting system When a business event occurs, the accountant takes the event and records it in a tool called a “journal”.

📌 journal

There are two types of journals called “initial journals. with the final journal" Accountants are used to record events. In this business

By using debits and credits to symbolize the movement of the accounting equation (by no means or associated with any with debit and credit cards)

where debits will be represented on the left And credit will represent the right side, but debit doesn't mean that the item will increase and credit doesn't always mean it will decrease. The increase or decrease depends on the category of the account again.

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