The Simple Ledger

Ledger Accounts

• More definitions guys!

• Any time we list the cash we have in the bank, money owed to us, money we owe to people, a mortgage, or anything…we call these accounts.

Ledger Accounts

• A Ledger is the name for a group or file of accounts.

• Accounts can be prepared several different ways. They can be on paper, in a binder, on cards, or electronic. This is obviously the most popular nowadays

Ledger Accounts

• A T-Account is a simple way of looking at accounts from the balance sheet.

• It looks like this. Cash

Ledger Accounts

• Let’s look at the board.

Important Features of Ledger Accounts

• Every item on the balance sheet is given its own T-Account. Start calling the entry items “cash account,” “B. Chen account,” etc.

• If a dollar sign is used, it is put on the first line only. This is the “beginning value.”

• The value is placed on whatever side of the “T” that you would put the value in the equation.Assets= Liabilities + Owner’s Equity

Important Features of the Ledger Account

Let’s review some things.

• What is an account?

• What is a ledger?

• How can ledgers be kept?

• Knowing what you now know…why do we sometimes call a company’s financial records, “the books?”

Exercise 1 – Steven’s Woodworking

Exercise 2 – Dr. Pauline Inaba

Exercise 3 – Lily Wall

• What is her:-Capital?

• What is the equationlike?

Homework (for tomorrow)

• Exercise #4 on page 92.