Ledgers are where the accounts are kept. They fall into two categories

  1. Personal accounts
  2. Impersonal accounts

With few accounts they can all be recorded in a single ledger. But the larger the number of accounts a sub-division of the ledger is appropriate.

Personal accounts are where the transactions for customers and suppliers are kept known as Sales Ledger and Purchase (or Bought) Ledger respectively.

Impersonal accounts are where all other accounts are kept. They can be referred to as Real, meaning Property accounts (assets, stock etc.) or Nominal, meaning income and expenditure accounts. Cash and Bank Accounts may also be separated out into a “Cash Book”. Whilst a Cash Book may give the appearance of being a daybook it is actually a ledger as it holds the cash and bank accounts.

Ledgers contain accounts and Daybooks are mere, but convenient, listing devices to prevent unnecessary detail being recorded in their relevant accounts.