General Ledger

Recording in T-accounts and general ledger

T-Accounts and the General Ledger

The general ledger contains all the accounts of a business organised in T-account format. The left side is the debit side (Dr), the right side is the credit side (Cr). Each account shows increases and decreases. Transactions from journals are 'posted' (transferred) to the ledger.

Example

T-Account Format

Bank Account Dr (debit) | Cr (credit) Capital R50 000 | Rent R3 000 Sales R5 000 | Stock R8 000 | Equipment R15 000 Total: R55 000 | Total: R26 000 Balance: R29 000 (Dr) Rules: Assets increase on Dr side. Income increases on Cr side. Expenses increase on Dr side.

Note

Remember

DEAD CLIC helps remember debit/credit rules: Debits increase Expenses, Assets, Drawings. Credits increase Liabilities, Income, Capital. Every transaction has equal debits and credits. The ledger is the main book of accounts.

Key Vocabulary

LedgerThe main book containing all accounts of a business

DebitThe left side of a T-account (increases assets/expenses)

CreditThe right side of a T-account (increases liabilities/income)

PostingTransferring entries from journals to the ledger

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Ledger

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