The ledger

Vocabulary to be memorized

1. hence звідси ( про походження ); тому, отже

2. a ledger головна бухгалтерська книга

3. a journal журнал

4. acknowledge визнавати, допускати; підтверджувати (отримання)

5. the book of original entry головна бухгалтерська книга (першоджерело)

6. a bound book зшита книга

7. a bound ledger – зшитий гросбух

8. data processing обробка даних

9. manual or mechanical methods методи обробки (інформації) вручну або за допомогою механічних пристроїв

10. a loose-leaf binder швидкозшивач syn: self-binder

11. filing cabinet картотечний блок

12. to rearrange міняти, пересувати, переробляти, переставляти, перевлаштовувати, трансформувати

Read the text to find out the information about possible ways of storing accounting data in the ledger.

Business transactions are analysed and recorded in debit and credit form for the first time in the jour­nal, hence, the journal was acknowledged as the “book” of original entry. Now if these debits and credits are to be transferred to the ledger, it follows that the ledger will be the "book" of secondary entry in fact. No further transfer of debits and credits is required, therefore, the ledger may be acknowledged correctly as the “book" of final entry.

You might have noticed that quotation marks have been placed around the work "book." These marks show that in modern accounting practice accounts may or may not be stored or filed in a book. This idea is very im­portant because many changes have occurred since writings first ap­peared in 1494 on books of accounts. In the past, the ledger in which accounts were kept was a bound book; from this fact came the original definition of the ledger as the "book" of accounts. Some small businesses still use a bound ledger but today the system of filing or storing the ledger accounts varies according to the modern method of data processing used by the business. In manual or mechanical methods the present tendency is to use loose-leaf forms printed on paper or cards. The account can then be kept in a loose-leaf binder, a filing cabinet or in ledger trays. Within any of these files, the loose-leaf ledger offers greater flexibility: the ledger accounts may be rearranged if necessary, and the ledger sheets or cards may be removed readily so that entries can be made with manual or mechanical aids. For a computer method of processing accounting data, however the information for accounts may be stored on magnetic tape or on magnetic disk. The term ‘ledger’, therefore, should be viewed today as a group of accounts that are filed according to the method of data processing adopted by the business.

Answer the following questions.

1. Where are business transactions analysed and recorded for the first time?

2. Why was the journal acknowledged first as the “book” of original entry

3. What can be called a “book” of secondary and at last of final entry? Why?

4. Why the quotation marks have been placed around the work "book."?

5. What was the original definition of the ledger?

6. What is the reason for using different forms of ledgers? Can you name them?

7. What definition can be given to a modern ledger?