What is the General Ledger Maui Hawaii?

What is the General Ledger Maui Hawaii?

New Start Maui

Accounting, Bookkeeping, & Tax

Phone: 808-244-5600

www.newstartmaui.com

Explaining the purpose of the General Ledger is perhaps a difficult task for any teacher of Accounting. One reason is because in this age of computers and information technology, the General Ledger does not any longer have an easily identifiable physical form. Maui Hawaii.

In early times a Ledger would have taken the form of a book, and hence the term "Bookkeeping". The purpose of such a ledger was to record transactions. The pages of the Ledger would have been ruled into columns to facilitate neatness and discipline in writing figures.

In more recent times, prior to the computer age, the General Ledger was a large loose-leaf document containing in a special adjustable binder.

The standard form for a page in a general ledger is portrayed by Figure 3 below. There are three columns for recording money - Debit, Credit and Balance. There is one page in the General Ledger for each Account, and typically the number of Accounts will be many, depending on the Chart of Accounts Maui Hawaii.

Provided the General Ledger is up to date Maui, the General Ledger will show the current balance of each account. The balance of the Cash at Bank A/c is $6,927.10. The account shows the Cash Receipts every month (money coming in) and Cash Payments (money going out). The monthly figures for Cash Receipts and Cash Payments are in fact the totals posted from the Cash Receipts Journal and Cash Payments Journals.

Perhaps the best way to explain the purpose of the General Ledger is to provide a diagram.

First of all, it is important to remember that the purpose of the Accounting Process is to summarize, record and make sense of, the thousands of financial transactions that occur in a year, so that Financial Reports can be produced.

The General Ledger receives, on a monthly basis, summarized information from the Journals (which are themselves the basic day-to-day record of transactions).

At the end of the financial year, the General Ledger then provides a final balance for each account, summarizing all the monthly journal postings.

Today, in most businesses, the General Ledger is a component of Financial Accounting Software and exists in the form of an electronic database.

In teaching the General Ledger, however, most teachers still revert to explanations which use the earlier paper-based form. The explanation given on this web page will also rely on the paper-based form Maui Hawaii.