Ledgers

Distributed Ledger Technology (DLT) forms the basis of a Blockchain solution. Before we understand how that works, we must first understand the concept of a ledger.

An accounting ledger is a record book (referred to as a journal) used to maintain entries for balance sheet and income statement transactions. Accounting ledger journal entries can include information such as cash receivable, investments, inventory, payable, accrued expenses, and customer deposits. Balance sheet ledgers include asset ledgers, such as cash or accounts receivable. Income statement ledgers can include ledgers as revenue and expenses.

The accounting ledger, sometimes called the general ledger, provides a centralized repository to collect all account data rolled up from sub-ledgers or modules, making it the backbone of any corporate financial system.

The accounting ledger is used to generate the key financial statements: the income statement, cash flow statement, and balance sheet for the company. Posting to an accounting ledger is known as bookkeeping.

While ledgers may have been digitized and are available as complex accounting systems, their basic design and working principles still mimic the traditional ledgers.

How DLT works