Bookkeeping and accounting are crucial administrative tasks that businesses need to accomplish to manage their finances adequately. Enterprises incur many kinds of business transactions; they earn revenues and incur expenses, among many other transaction activities.

The different natures of business transactions impact the record-keeping and accounting practices of enterprises. Accordingly, it can be overwhelming to businesses and organizations using double-entry bookkeeping and accrual accounting.

Businesses using these accounting and bookkeeping methods can improve their efficiency and accuracy in publishing income statements, balance sheets, and other accounting reports by ensuring that their accounting journals and ledgers are up-to-date and balanced.

The accounting journal only records business transactions in order as they occur. Meanwhile, the ledger organizes transaction entries by their nature and reveals the account’s transaction history and current balance. With this, the ledger book serves a significant purpose in the accounting cycle of a business.

Identifying the Different Types of Ledgers and How They Are Used

What is a ledger?

A ledger is a book or record of all transaction data logged in the business’s accounting journals. It provides detailed information of every journal entry, enabling enterprises to review the transaction history and check the current balance in their accounting system accounts.

In addition, the ledger also serves as an authoritative source of data for creating a business’s financial accounting reports.

What are the different types of ledgers in accounting?

Predominantly there are three different types of ledgers: Sales Ledger, Purchase Ledger, and General Ledger, and each holds specific business transactions.

Sales Ledger

A sales ledger records transactions activities related to the sales that the business has made, the earnings it received for its offered goods or services, and the amount of money owed to them by their customers who acquired their commodities on credit.

In this ledger, sales transaction information can be fairly descriptive. It shows the invoice number, the customer’s name, sale date, items sold, total sale amount, taxes, and even the shipping fee charged.

The information logged in the sales ledger can be used to show the sales figure in the business’s income statements. The ledger can also be used as proof during auditing: it can verify that the total sales amount detailed in its accounting reports is correct and show the list of invoices that comprise the sales figures in the financial statements.

Sales Ledger

Purchase Ledger

The purchase ledger records all transactions activities related to the business’s purchases. It also shows which purchase transactions have been paid and which have an outstanding balance to be paid for.

Like in the sales ledger, transaction activities are recorded in detail in the purchase ledger. Hence, the book will show the purchase date, supplier name, invoice number, items purchased, purchase amount, tax amount, and payment status, which states whether the entry is paid or not.

This ledger helps businesses monitor all of their purchases as well as the balances due to their creditors or suppliers.

General Ledger

The general ledger is the master book or record of all transactions that an entity incurs since the beginning of its operation. And since it records every business transaction, regardless of the transaction’s nature, the general ledger typically has five individual books of accounts: assets, liabilities, equity, revenue, and expense.

This ledger is the main accounting record that businesses use to produce trial balances, financial statements, and cash flow statements.


The abovementioned ledger books are among the essential documents in a business entity’s record-keeping and accounting systems. The information logged in these ledgers enables them to produce accurate and correct accounting reports.

In the past, bookkeepers and accountants manually maintain their company’s accounting journals and ledgers; however, this conventional process of recording transactions has become inefficient for businesses in this modern era.

Businesses can leverage accounting and bookkeeping services from reputable providers to ensure accurate and up-to-date bookkeeping and accounting records and remain competitive in the current business landscape. By utilizing a business accounting software program, they can efficiently and correctly record financial transactions and produce detailed financial statements, further showing if their company is performing well or if its financial health is in bad shape.

KIPPIN is a cloud accounting and bookkeeping service tailored to simplify the everyday tasks of businesses. We provide software-only solutions to automate processes, making them quick, easy, and remotely accessible. We also align our clients to top bookkeepers and accountants on our platform.

Contact us today at 1-905-581-9362 or email us at [email protected] You may also chat with us at to learn more about our product and service lineup.


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