When recording transactions, the first thing one needs to do is to journalize the transactions of the company and then post these on a ledger, which is the primary book of recording accounts. The information entered in the ledger needs to be classified further into journals or sub-divided journals. A ledger is basically a collection of accounts of three types – personal, real and nominal.
The account maintained in ledgers and each account is allotted a fixed number of pages. In banks, ledgers are rules to suit cases where the balance is altered with every transaction. Otherwise, one can rule the ledger to suit cases where the balance is altered only periodically.
One must take care to ensure that every transaction is accompanied with their respective dates. There has to be a separate column under which the dates have to be entered and this column should be the first column on the left of each account. All the relevant details of the transactions need to be recorded on the left side of the account, including the amount that is to be debited and the amount that needs to be credited needs to be recorded on the right side of the account. In every ledger account, each entry on the debit side needs to commence with “To” and the credit entries with “By”. Other references need to be recorded in the ‘particulars column’ so that every account can be cross checked and verified. The page of the journal needs to be entered in the ‘folio column’ but there are times when one would need to enter the page of the relevant sub-divided journal from which the particular entry has been posted. Under the folio column of the journal, one needs to enter the page number of the ledger that features the corresponding account.
Ledger writing might seem slightly complicated at the beginning, but once one has the hang of the way the entries are written, one will be able to make such entries accurately. This will result in a neat tabulation of accounts which will be of immense help each time someone is required to refer to the accounts entered in the ledger.
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