In accounting a ledger is used to track and record financial transactions. The transactions can be posted on the ledger as accounts receivable, accounts payable or cash. The entries made on the general ledger are used to generate the income statement. Five main account types make up the general ledger; these include liabilities, assets, revenues, owner’s equity and expenses. The key to an accurate ledger is to be sure that the total amount of debits equals the total amount of credits once both figures are calculated.
Determine whether you will write your ledger on a piece of paper or use a computer spreadsheet program such as Excel. Excel works well because most computers have the program and it allows you to create new worksheets on one file; this is helpful if you are making ledgers for more than one account.
Determine whether the entry should be entered as a debit or credit. In simple terms, a credit is what comes in and a debit is what goes out. In other words, a debit is when is a payment is made or owed and a credit is when a payment is received.
Make an entry for each transaction. Every transaction should be dated. In “T” account fashion, the date and debit should always be recorded on the left side and all credits should be recorded on the right side. A “T” account is a formal bookkeeping term that represents two sides of a transaction. When written out, the entries form a "T."
Total each column. The total debits should be equal to the total credits. If these figures do not balance, go back and check your entries.
Create a "Notes" column in order to document other accounts involved in a transaction. Although it is not mandatory that you have a "Notes" column, you may find it helpful when you reconcile payments.
Kesha Ward has been a professional writer since 2010. With a Bachelor of Science in applied economics, she brings more than a decade of experience in public finance.