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Dictionary of Law Terms: Ledger

The Journal in combining each class of accounts, which are transferred once a month to the Ledger is greatly simplified, while the Ledger is abridged within a very small space.

By this arrangement the Ledger may be regarded as a general index to the Journal, as each account is presented in a condensed form, and may be examined without difficulty or delay. By this method too, only one general account of goods is opened, instead of one for each kind of goods as by the Italian method; and, therefore, the difficulty of keeping the Journal and Ledger from falling behind is avoided, as would necessarily be the case in an extensive business where separate accounts for each kind of goods may be kept. These particulars should be confined to the Stock-book, whose profits and losses should always correspond with the result of goods in the Ledger. The usefulness of the present practice is still more marked in regard to the balancing of the Ledger, both in relation to time and labor.

A merchant doing a cash business only requires a Cash-book, wherein all his transactions are entered on its appropriate side. On the one side is recorded all he pays out, and the object for which the payment was made; and on the other all he receives, with vouchers for the same. The state of his business will appear at any time from the balance between the two sides. If, for example, his Cash-book has on the debtor side a total transaction of $1,500.75, and on the credit side $650.50, the difference, $850.25 is the amount which he should have on hand. These figures will appear on the Cash-book, as follows: