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Ledger accounting and double-entry bookkeeping

Ledger accounts, debits and credits

5.1 What is a ledger account?

An account is a record of the transactions relating to a particular item.

In this chapter we are concerned with the nominal or general ledger, which is the
ledger containing all of the accounts necessary to summarise an entity’s transactions
and prepare a statement of financial position and statement of profit or loss.

Each account comprises two sides: the left-hand side is referred to as the debit side,
and the right-hand side is referred to as the credit side. The format is shown below:

Debit (Dr) Credit (Cr)

Date Details $ Date Details $

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