I want to know the difference between the words ledger and accounts. I don't work in an accounts department and know nothing of it. Can anybody explain it to me please?

The following definition is an excerpt from the Longman dictionary of contemporary English.


a book in which a business, bank etc records how much money it receives and spends



a)[plural] an exact record of the money that a company has received and the money it has spent

1 Answer 1


The ledger is the collection of accounts.

Ledger and accounts relate to standard accounting practice.

You first record any business transaction in a journal, which is a book or the electronic equivalent of a book. This leaves transactions in simple chronological order. The information recorded includes the date, amount, description, and two accounts. The accounts are identified by number, and their purpose is to categorize the transaction.

For example, suppose you pay a debt. One account categorizes the transaction according to which debt it is. The other account categorizes the transaction by the source of currency with which you paid it, such as a checking account.

Every journal entry is then copied to a ledger, which is a second book organized not chronologically but by account number. The entry is copied twice, so that it is listed under both account numbers in the ledger.

  • +1 for the (imo quite good) short introduction to accountancy. Commented Dec 14, 2012 at 7:12
  • You start out by saying that “[T]he ledger is the collection of accounts.” But, in the end, you mention that “[e]very journal entry is copied to a ledger […] organized […] by account number.” To me (as a non-accountant), these two statements seem contradictory. Is maybe the first referring to a general ledger, and the latter to some sort of _sub_ledger?
    – BigSmoke
    Commented Jul 29, 2022 at 15:55
  • 1
    @BigSmoke The two statements refer to the same thing: a book, or electronic equivalent. The ledger is organized by account number, meaning that the ledger transactions are grouped together by account number.
    – MetaEd
    Commented Aug 11, 2022 at 23:34
  • 1
    @BigSmoke A subledger is a different animal. Historically, if you were using subledgers, your procedure was to record each individual transaction in the appropriate subledger. Then from time to time you would update the primary or general ledger with just a single transaction that represented all the changes made to the subledger since the last time you made such an update. But in a modern accounting system, you might see inventory written on or off of a specific SKU subledger which the system automatically rolls up into the current inventory assets general ledger.
    – MetaEd
    Commented Aug 11, 2022 at 23:36
  • Thank you for taking the time to further clarify the terminology for me, @MetaEd.
    – BigSmoke
    Commented Aug 23, 2022 at 10:24

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