The Main Ledgers

The Creditors' Ledger

The Debtors' Ledger

The Cash Book

The General Ledger

All of the ledgers contain "accounts". These "accounts", just like bank accounts are either in credit or in debt.

For Pepe's Pizza Parlour, when Pepe has money in his bank account then the bank owes Pepe money. In this case Pepe is the bank's creditor and the bank is his debtor. In fact Pepe is overdrawn and has an arranged overdraft. Pepe owes the bank money. In this case Pepe is the bank's debtor and the bank is Pepe's creditor.

Every party with which Pepe's Pizza Parlour has a transaction has an "account" with the business i.e. people who Pepe buys goods from and people who Pepe sells goods to. In addition there are accounts to represent how much equipment the business owns, expense accounts to cover the day to day expenses of the business. If Pepe opens an account with someone new it simply means that he gives them a page in one of the ledgers. Every one of these accounts can be either in credit (where the business is owed money) or in debt (where the business owes somebody else money).

If you want to have a look at these ledgers or the cash book hit one of the hotwords below. Alternatively, you can return to the menu.

The Creditors ledger.

The Debtors ledger.

The Cash book.

The General ledger.

Source:
http://www.bized.co.uk