Bookkeeping II- Introduction to Ledgers

Bookkeeping II will provide an introduction to the fundamentals of Ledgering. The creation of ledgers in accounting will provide the organization of a direct picture into the expenditures and cash flow of the corporate structure on a monthly basis, and a holistic picture of the financial standpoint in earnings, dividends and cost for a whole year. There are important considerations made when designing a ledger system for a company. On a standard practice a common cash book or main ledger is kept while a separate project specific ledger is also maintained for data integrity and process check and balance.

Keeping a Separate Ledger

There are two main points that are achieved in the maintenance and processing of an accounting culture that keeps a separate ledger aside from the master cash book. It solves the problem of quality degradation as your primary ledger gets buried in records with each passing year and it makes it efficient to pinpoint grey areas in accounting inconsistency and potential overlaps. Having a separate ledger for each department will create the right process specific breakdown for your cash flow. Typically there are up to 10 entries of the sub ledger into the general cash book as what is dictated by the FCRA or fair credit reporting act. The General ledger is also referred to as the FCRA cash book because it is used for auditing and taxation purposes.

Having a sub-ledger will help you segregate accounting costs for each department without the risk of control loss over the cash flow. In a sub-ledger you can open accounts by department head and relevancy in cost purpose.  This helps the company prepare its financial reports a lot easier and pinpoint financial activity to the tee.

Non-Relevant Ledgers

Bookkeeping II will teach you that in your accounting methodology you will find ledgers which will have no relation to any specific department will be kept as part of the FCRA ledger or the General cash book. This will be added to the summation of balance totals for the entire auditing data and will ink-up any remaining ledger balance that is not accounted for. In common accounting practice, linking up ledger balances are done within a seven month interval. When creating general and non-relevancy entries it’s important to avoid blank lines in between the entries to avoid tampering inquiry. If you do leave a blank line open, you can cross out the space with a wavy line.

Bookkeeping II is one of the accounting and financial management courses offered in www.lifestylelearningdirect.com/.