What is Double Entry Ledger - Definition - Meaning

Double Entry Ledger is prepared to record dual aspect of a Business Transaction. In a Ledger’s Account, Left side is for Debit while the right side is for Credit amounts alongwith the reasons why an Account is debited or credited.

For Example, if Mr. A Sold Goods Worth Rs. 10000 to Mr. B for Cash, this Double Journal Entry is recorded in the Cash book which is both a Journal and a Ledger as shown below:

                                                              Cash a/c   10000

                                                                            Sales a/c   10000

(Goods Sold For Cash Rs. 10000)

Cash Sales is posted to the debit side of Cash book as it is increasing.

You Can Also Study About, “Single Entry Ledger”

Similarly, when the Double Entry to record Cash Received from our customer, Mr. C to whom we sold goods worth 3000 on Credit basis is made then we pass following entry that is ultimately posted to the relevant ledgers as shown below:

                                                                 Cash a/c   3000

                                                                               Mr. C   3000

(Cash Received From Mr. C Rs. 3000)

Here, Cash is recorded in the Cash book while Mr. C is recorded on the credit side of Mr. C (Accounts Receivable Subsidiary Ledger).

Mr. C

For the Period

                                       Rs.                                                                             Rs.

  Cash                           3000