A central ledger (sometimes referred to as a “general ledger”) functions as a centralized record keeping repository of a company’s transactions including: revenues, expenses, equity, assets and liabilities, et al. With modern Enterprise Resource Planning software this central ledger will contain data such as-
Accurately tracking both financial data and non-financial data, the central ledger serves as the accounting system’s backbone, with each “tab” referred to as a “ledger account”.
In addition, every account will contain pages of entries referred to as “journal entries” which contain both debits and credits, and in this manner the central ledger is the source of all financial details and statements with many firms containing hundreds of ledger accounts and journal entries annually. This central ledger will also generate income statements, as well as provide cash flow and balance sheet details, making proper maintenance of the central ledger absolutely crucial to every company’s financial safety and stability.