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How to Construct a General Ledger for Your Business?


Transactions are recorded in the general ledger, a key accounting tool. The journal entry should be produced for every business transaction. T Accounts, which detail the status of each account, are then generated from the general ledger template.

The income statement, income statement, & cash flow statement are the three financial statements that will be generated from these data. Given its central role in constructing the company’s financial statements, the general ledger has great significance.

  1. Make four columns on a sheet of paper. Create a larger second column than the others.
  2. Call the first column “Date.” Write “Journal Entry” in the second column. Put “Debit Amount” in the third column.
  3. Record all business dealings in a general ledger. The “Date” column is where the transaction date should be entered. Put the transaction’s journal entry in the “Journal Entry” column. Debit entries should be entered first while keeping a journal. Credit entries should be the last in the journal. An indentation denotes accounts receivable in the journal. Put the amounts to be debited under “Debit Amount,” aligning them with the correct accounts, and the amounts to be credited under “Credit Amount,” aligning them with the correct accounts. On July 1st, for instance, a corporation might get $1000 in payment for their goods. If you want to start on July 1, put it in the “Date” box. Cash should be debited & sales should be credited in the “Journal Entry.” Do not forget to identify your sales pitches. Amounts of $1,000 should be entered in the “Debit Amount” field and matched with “Cash,” while the “Credit Amount” field should be matched with “Sales.”

Recording Money Received

Sales made with cash are those made with any kind of cash, including cash, cheques, debit cards, credit cards, & wire transfers.

The transaction is finalized when a customer pays for an item in full, either with cash or a check. The burden of sending invoices or chasing down payments is removed.

Customers who have been granted shop credit can settle their bills by bringing cash or mailing a check. If a customer pays you in cash, you must first enter the transaction into the cash receipts journal and then either the sales record or the customer’s accounts receivable ledger account.

Concluding a Sale for Cash

The sales receipt serves as the original documentation for a monetary transaction. This receipt is evidence that the sale was completed. The sales receipt will provide the consumer’s name, the sale date, the specific items purchased, and the total cost.

You will find the whole purchase price, including the tax, on the sales receipt. If your business accepts checks, ensure your staff members record the check number on the purchase receipt. The back of the check must be marked “for deposit only” or a similar notation by the employee.

Write Down The Cash Receipt

This diary is used to record all monetary transactions in chronological order. The sale details are recorded on the cash receipt, which can then be recorded in a diary. It is possible to disaggregate the sale into its constituent pieces (materials, supplies, and labor) once the data has been transferred. The sum of the parts should match the sum displayed on the sales receipt. The sales tax is not included in the cash receipts notebook.

Proceed With The Sales Pitch

The cash sales journal receives credit, and the cash receipts journal has a negative entry for the same transaction. For a cash sale of $500, for instance, the cash receipts journal would be debited $500, and the sales journal would be credited $500.

Customers often use a combo of cash and shop credit when making purchases.

To account for this transaction in the books, you would post a debit of $500 to the cash receipts journal, a debit of $1,500 to the customer’s accounts receivable, and a credit of $2,000.” – source, Wikipedia.

Funds Must Be Deposited

Funds received in cash should be deposited into an account at a financial institution using a deposit slip. To know who wrote a particular check, you need to list it separately. It is important to double-check the amount on the deposit slip and the cash receipts diary before completing the deposit.


The bank must issue you a receipt for each deposit you make. Verify that the sums on the bank receipt and the deposit slip match. For your records, you should save the bank receipt and a duplicate of the deposit slip that you stapled together.

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