Starting with the basics of accounting, we first of all need to understand the importance of keeping records of financial transactions. It’s essential not only for businesses but for individuals as well. The process of keeping records of transactions is called bookkeeping. One of the most important tools used in bookkeeping is an accounting ledger. It is a document that records all financial transactions made by the company or individual. It is similar to a diary or a journal which records everything that happened in a particular period. An accounting ledger contains all the accounts that are used by the organization. Each account must be maintained in a separate ledger, such as a cash account, accounts receivable, accounts payable, and so on. This classification helps in getting organized and tracking all types of financial transactions. In order to maintain a neat and organized accounting ledger, it is important to use free printable accounting forms. We’ve included an example above. This makes the bookkeeping process much easier and ensures that there are no errors or omissions. One of the most important pieces of information in a ledger is the date of the transaction. This helps in tracking the time the transaction took place and also helps in maintaining a chronological order of events. The next piece of information is the account name. The account name helps in identifying the account which was used in the transaction. Sometimes, it may be necessary to reference a specific document for a transaction. This document can be an invoice or a payment voucher. Including a reference number for this document in the ledger helps in cross-referencing the transaction if needed. After recording the basic details about the transaction, we move to the debit and credit columns. Debits are usually recorded on the left-hand side while credits are recorded on the right-hand side. These figures are added up and balanced at the end of each period to ensure that the figures are accurate. In addition to the above, there may be additional details required for certain types of transactions. For example, for a loan payment, details like the amount of principal and interest paid, the loan amount, and the remaining balance should be included. It is important to note that proper bookkeeping is a legal requirement for many businesses. It helps in keeping track of financial transactions and budgeting for future plans. It also makes it easier to prepare financial statements and tax reports for the government. In conclusion, accounting is an essential part of any business or individual’s financial life. A well-maintained accounting ledger with the help of free printable accounting forms helps in keeping track of financial transactions, and is a necessary tool to ensure accurate record keeping.
