The ledger, sometimes known as the nominal ledger, is the main accounting record of a business which uses double-entry bookkeeping. It will usually include accounts for such items as current ledger, fixed ledger, liabilities, revenue and expense items, gains and losses.
The ledger is a collection of the group of accounts that supports the items shown in the major financial statements. It is built up by posting transactions recorded in the general journal. The ledger can be supported by one or more subsidiary ledgers that provide details for accounts in the ledger. For instance, an accounts receivable subsidiary ledger would contain a separate account for each credit customer, tracking that customer’s balance separately. This subsidiary ledger would then be totaled and compared with its controlling account (in this case, Accounts Receivable) to ensure accuracy as part of the process of preparing a trial balance.
There are seven basic categories in which all accounts are grouped:
The balance sheet and the income statement are both derived from the ledger. Each account in the ledger consists of one or more pages. The ledger is where posting to the accounts occurs. Posting is the process of recording amounts as credits, (right side), and amounts as debits, (left side), in the pages of the ledger. Additional columns to the right hold a running activity total (similar to a checkbook).
The listing of the account names is called the chart of accounts. The extraction of account balances is called a trial balance. The purpose of the trial balance is, at a preliminary stage of the financial statement preparation process, to ensure the equality of the total debits and credits.
The ledger should include the date, description and balance or total amount for each account. It is usually divided into at least seven main categories. These categories generally include ledger, liabilities, owner’s equity, revenue, expenses, gains and losses. The main categories of the ledger may be further subdivided into subledgers to include additional details of such accounts as cash, accounts receivable, accounts payable, etc.
Because each bookkeeping entry debits one account and credits another account in an equal amounts, the double-entry bookkeeping system helps ensure that the ledger is always in balance, thus maintaining the accounting equation:
1.1 STATEMENT OF PROBLEM
The main problem of this study was to examine and evaluate the physical, social and economic effect of the school ledger and its uses in its present location and recommend solution to the problems identified, because there has been series of criticism against the manner by which ledger are being handled and maintained. The problems are: improper accounting for school ledger, illegal use of the institutional ledger, inefficient recording keeping of institutional ledger.