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How to use ledger and account books

Updated February 08, 2018

Ledgers and account books were the primary means of tabulating both business and household finances prior to the use of computers, and they are still used today by various small businesses and home budget experts. A ledger is a book with pages lined both vertically and horizontally. The lines create cells for the easy entry of data related to business income and expenditures. At the end of a weekly, monthly, quarterly or annual period, the entries in each column and row are clearly aligned and easily tabulated for preparing reports or assessing a budget.

Label a page or section of your ledger or account book to identify its purpose. For example, if you are tracking household expenses, an appropriate label would be "Household."

Determine if multiple pages of your ledger will be needed to track your expenses and income. If you run a small business, multiple pages will likely be necessary. Potential page headings would include vehicle expenses, utility expenses, inventory costs and income from sales or services rendered.

Label the column and row headers on your ledger's pages. It is important to do this before entries are made within the columns to ensure accurate data input. Column headings are usually a breakdown of various expenses, such as entertainment expenditures, fuel purchases and credit card payments, while row headings can be dedicated to time periods, such as weeks or months of the year.

Tabulate the totals for data entered in the cells of your ledger at the end of an accounting period. Add up the numbers entered across a row and down a column of the ledger. If your math is done correctly, then the sum of all of the rows in a section of your ledger will be equal to the sum of your columns.

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About the Author

Ashley Mott has 12 years of small business management experience and a BSBA in accounting from Columbia. She is a full-time government and public safety reporter for Gannett.