Here, Sales Return refers to the goods that your customers return. In addition to this, it also records the sales return. Further, it showcases the amount your customers owe to you or the amount that is yet to be received from them. Thus, it contains a collection of accounts associated with your customers. Here, debtors are nothing but the business entities to whom you have sold goods that you manufacture. It records all the transactions that take place between you and your debtors. Sales Ledger or Debtors Ledger is one of the three types of Ledgers that you prepare as a firm or a business entity. Likewise, you need to refer to the Creditor’s Account in your General Leger if you want to know the amount you are liable to pay to him on a specific date. So, you need to refer to your Customer’s Account in your General Ledger if you want to know the amount he is expected to pay you on a particular date. Therefore, a General Ledger helps you to know the ultimate result of all the transactions that take place with regards to specific accounts on a given date.įor this reason, General Ledger is also known as the Principal Book of Accounting System. Accordingly, all the cash or credit purchase transactions entered into with William Paper Mill would be recorded under the account of William Paper Mill. It is a group or collection of accounts that give you information regarding the detailed transactions with respect to each of such accounts.įor example, say you purchase raw material from your vendor William Paper Mill throughout the year. General Ledger refers to a record containing individual accounts showcasing the transactions related to each of such accounts. You will also learn the reasons as to why you need a General Ledger? So, in this article, you will learn what is a General Ledger, General Ledger examples, and the General Ledger accounts. Once you complete the Trial Balance, the account balance is finally entered in the income statement and the balance sheet. Then, the balance of each of the General Ledger Accounts is posted in your Trial Balance Sheet. Once the Journal is complete, these transactions are then posted to individual accounts contained in General Ledger. First, the transactions are recorded in the Original Book of Entry, known as Journal. Now, each of your transactions follows a procedure before they are represented in the final books of accounts. So such a system of debit and credit helps in finding out the final position of every item at the end of the given accounting period. Thus, accounts that get Debited or Credited are used to denote the give and take involved in every transaction. ![]() This means one account increases and the other account decreases. ![]() ![]() Thus, as per the Duality Principle, each transaction involves a minimum of two accounts while recording into books. Facilities - Some of our facilities funding is variable and therefore a GL account allows the flexibility to invoice customers for the income when it's agreed.You need to record various business transactions in your books of accounts based on the dual aspect of accounting.Courses - The department's courses are also set up on GL accounts to manage all associated income and expenditure for them and show how the course is at the very least covering its expenses.Small Research Facilities (SRFs) - We have a number of SRFs in the department which are run on GL accounts, they would incur the costs associated with running the facility, and then the income resulted in charging users of the equipment.The funds are often used to cover staff costs (subject to approval), consumables, equipment and travel expenses. PI Funds - This is funding which PIs gain from many sources including donations, speaker fees and travel reimbursement.Operational Funding - Used to cover a number of staff salaries, rental payments for space, utilities, equipment, building projects, staff development, communication expenses, student costs and much more!. ![]() Typically GL accounts are used for a whole range of reasons including: These are different to Research Grants, with a greater level of flexibility. The department has a number of General Ledger (GL) accounts.
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