What is a ledger?

A ledger is the master record where all financial transactions are organized by account. Think of it as the brain of the bookkeeping Every dollar that moves through a business eventually lands in the ledger, sorted into categories.

Transactions happen first.

Then they get classified and stored in the ledger.

For example:

Date Description Debit Credit

Mar 1 Office supplies $50

Mar 1 Cash $50

The entry eventually lives inside the office supplies account and the cash account inside the ledger.

The structure of a ledger is basically a collection of accounts. Each account tracks one category of money.

For example

Cash

Accounts Receivable

Accounts Payable

Revenue

Expenses

Equity

All of these accounts together form the general ledger.

The general ledger is the source for the big financial reports:

Balance Sheet

Income Statement

Cash Flow Statement

If those reports are the final story, the ledger is the library of evidence behind it.