Chapter 2, Problem 1DQ

What is the difference between an account and a ledger?

To determine

Discuss the difference between an account and a ledger.

Explanation of Solution

The Recording Process: The recording process of any accounting transaction starts with analyzing the transaction, journalizing the transaction, and posting them into the relevant account.

Differences between account and ledger are explained below:

• An account refers to a financial record in the general ledger, where increase or decrease in the values of assets, liabilities, stockholder’s equity, revenues and expenditures of the business, pertaining to a particular period are recorded.
• A ledger refers to the collection of different accounts maintained by the business during a particular period that records the changes during the specific period, and provides the balance at the end of the period.