just came across this really good explanation from wikipedia of what a
ledger is
http://en.wikipedia.org/wiki/Ledger
A *ledger*[1] <http://en.wikipedia.org/wiki/Ledger#cite_note-0> is the
principal book or computer file for recording and totaling monetary
transactions by account, with debits and credits in separate columns and a
beginning balance and ending balance for each account. The ledger is a
permanent summary of all amounts entered in supporting
journals<http://en.wikipedia.org/wiki/General_journal> which
list individual transactions by date. Every transaction flows from a
journal to one or more ledgers. A company's financial
statements<http://en.wikipedia.org/wiki/Financial_statement> are
generated from summary totals in the
ledgers.[2]<http://en.wikipedia.org/wiki/Ledger#cite_note-1>
Ledgers include:
- Sales ledger <http://en.wikipedia.org/wiki/Sales_ledger>, records accounts
receivable <http://en.wikipedia.org/wiki/Accounts_receivable>. This
ledger consists of the financial transactions made by customers to the
company.
- Purchase ledger <http://en.wikipedia.org/wiki/Purchase_ledger> records
money spent for purchasing by the company.
- General ledger <http://en.wikipedia.org/wiki/General_ledger> representing
the 5 main account types: assets <http://en.wikipedia.org/wiki/Assets>,
liabilities<http://en.wikipedia.org/wiki/Liability_(financial_accounting)>
, income <http://en.wikipedia.org/wiki/Income>,
expenses<http://en.wikipedia.org/wiki/Expenses>,
and equity <http://en.wikipedia.org/wiki/Equity_(finance)>.
For every debit <http://en.wikipedia.org/wiki/Debits_and_credits> recorded
in a ledger, there must be a corresponding
credit<http://en.wikipedia.org/wiki/Debits_and_credits> so
that the debits equal the credits in the grand totals.
On Fri, Jun 8, 2012 at 9:37 AM, Raja Iskandar Shah
<[email protected]>wrote:
> yes, i concur on all points.
>
>
>
> On Thu, Jun 7, 2012 at 11:14 PM, Brian Wolf <[email protected]> wrote:
>
>> Matthew makes some good points. I'm new to both accounting in general
>> and LedgerSMB in particular; and I would find it very helpful to have both
>> a general explanation and specific examples of transactions.
>>
>> Thanks.
>> Brian
>>
>> ------------------------------
>> Brian Wolf
>> Activus Technologies
>> Phone: 410.367.2958
>> Email: [email protected]
>> Try out Activus Secure Payments™, our recurring payments application.
>> Demo at http://demo.activustech.com
>> ------------------------------
>>
>> On 06/07/2012 10:31 AM, Matthew Bourque wrote:
>>
>> On Sun, Jun 3, 2012 at 10:09 AM, Raja Iskandar Shah <
>> [email protected]> wrote:
>>
>>> matthew, would things like these be helpful for you to understand the
>>> chart of accounts ?
>>
>>
>> Yes, a "basic accounting" chapter would be quite helpful, and your
>> outline seems like a good one. I also think that a section with examples,
>> as you suggest, would be very helpful.
>>
>> I have one idea about this section: I think, since this book is intended
>> to be for LSMB users in particular, it would be helpful to integrate a
>> "quickstart" guide throughout these examples. I would like to see a set of
>> examples of common business transactions, with three parts to each example:
>> what happens in reality (e.g. Example, Inc. buys some parts from a
>> supplier); what happens in "accounting logic" (credit bank account, debit
>> inventory account); and finally a walkthrough of how a typical LSMB
>> workflow for this transaction would go.
>>
>> It might be that a brand-new user with a brand-new LSMB installation
>> wouldn't be able to reproduce all of these examples without some initial
>> work (setting up bank accounts and vendors, etc.), but I still think that
>> it would help illuminate the accounting principles to have concrete
>> examples, and it would start the reader getting familiar with LSMB. Once a
>> newbie has gone on & set up a company database & started working, the
>> examples could serve as a useful template for common transactions they'll
>> have to deal with.
>>
>> yrs
>> matt
>>
>>
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