Perception: July 2011

Accounting is everywhere in the business these days, which you can't get rid of it anytime in the business. Took time time learn basics of Accounting, I'm not sure I'm on the right path to learn the stuff, but trying to start with searching on most necessary Terms..

General Ledger

A Company's Accounting Records. This formal ledger contains all the financial accounts records and statements of a business

The ledger uses two columns: one records debits, the other has offsetting credits.

Account Reconcilement

The process of confirming that two separate records of transactions in an account are equal. This can happen internally with a bank or broker, such as between general ledger entries and individual account records. Reconcilement also occurs when a customer of a bank or broker confirms that his or her personal records match what is reported on periodic statements. Ther term can also refer to balancing the books and records of a business with software programs and data entries.

Account reconcilement within financial institutions is a key regulatory and compliance function, and it is a primary focus for outside regulators in their routine audits of the firm. Customers of these firms should also keep an accurate record and report discrepancies promptly.

With the advent of computer systems to record transactions and client positions, reconciling often amounts to fixing small discrepancies of a few dollars, or even pennies, between one source and another. The longer an error goes uncovered, the more difficult it will be to reconcile the two records.

Account Receivable Subsidiary Ledger

An accounting ledger that shows the transaction and payment history separately for each customer to whom the business extends credit. The balance in each customer account is periodically reconciled with the accounts receivable balance in the general ledger, to ensure accuracy. The subsidiary ledger is also commonly referred to as the subledger or subaccount.

The usefulness of the accounts receivable subsidiary ledger lies in the fact that it can show, at a glance, the account status and amounts owed by a specific customer. For example, the general balance may show a total accounts receivable balance of $100,000, but it will not show which customer owes how much. This information can be gleaned from the accounts receivable subsidiary ledger.

Accounts Payable Subsidiary Ledger

An accounting ledger that shows the transaction history and amounts owed separately for each supplier from whom the business receives credit for purchases. The balance in the customer accounts is periodically reconciled with the accounts payable (AP) balance in the general ledger to ensure accuracy. The AP subsidiary ledger is also commonly referred to as the AP subledger or subaccount.

The utility of the accounts payable subsidiary ledger lies in the fact that it can show at a glance the amounts owed to a specific supplier. For example, the general balance may show a total accounts payable balance of $50,000, but it will not show which supplier is owed how much. This information can be gleaned from the accounts payable subsidiary ledger.

General Journal

The general journal is where double entry bookkeeping entries are recorded by debiting one or more accounts and crediting another one or more accounts with the same total amount. The total amount debited and the total amount credited should always be equal, thereby ensuring the accounting equation is maintained

A general journal entry includes:

1. The date of the transaction;

2. Titles of the accounts debited and credited (credited account is indented several spaces);

3. The amount of each debit and credit; and,

4. An explanation of the transaction also known as a Narration.

References

http://www.trizle.com/tips/28-general-ledger

http://www.investopedia.com/terms/g/generalledger.asp

http://www.middlecity.com/ch03.shtml

http://en.wikipedia.org/wiki/General_ledger

http://en.wikipedia.org/wiki/General_journal

http://en.wikipedia.org/wiki/Collection_agency