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Ledger accounting and double-entry bookkeeping
Ledger accounts, debits and credits
3.1 What is a ledger account?
An account is a record of the transactions involving a particular item.
A ledger account may be thought of as a record kept as a page in a book.
The book contains many pages – many accounts – and is referred to as a ledger.
In this chapter we are concerned with the nominal ledger, which is the ledger
containing all of the accounts necessary to summarise an organisation’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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