Chapter 2, Problem 2.1DQ

What is the difference between an account and a ledger?

To determine

Explain the difference between an account and a ledger.

Explanation of Solution

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

• An account refers to a financial record in the general ledger, where the increase or decrease in the values of the assets, liabilities, stockholder’s equity, revenues or 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.