Whats the difference (if any), between the following accountig terms:
- General Ledger
- Chart of Accounts
- Set of books
AND
- journal vs ledger
- account vs journal
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General Ledger: Main accounting record. It holds the summary information on the main accounts and is used to build the different accounting statements. I see it as the aggragation of entries by categories of activity. Chart of Accounts: This is the description of all the catagories that the accounting information will be organized in. Each account is a category of accounting activity. The chart of accounts is sort of a table of contents describing the categories that the business will be using and how it will be used. Journal: Journal is really a set of entries just describing the day to day activity. In computer terms its like a log of business events that occured one after the other. To close up the journal it feeds tinto the accounts (the aggregate categories of accounting). Set of Books: Because accounting was originally done in books this use to describe the different books that house the different accounting enteries. So there would be a book for the journal entries (Book of entries) and a book for the accounts and so on. So this is just where all of the accouting entries are made. |
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