Glossary · Also called Debtors ledger
Sales ledger
The ledger holding a separate account for every customer who buys on credit.
What it means
The subsidiary ledger of personal accounts for trade receivables, showing how much each individual customer owes.
Example
If forty customers buy on credit, the sales ledger has forty accounts, one per customer, each with its own running balance.
Why it matters
Adding up all the customer balances should equal the sales ledger control account, a built-in accuracy check.
In practice
The sales ledger, also called the receivables ledger, is a subsidiary ledger outside the main double entry. Its customer balances are memorandum records, supported by the sales ledger control account in the nominal ledger. Each customer account is debited when an invoice is issued and credited when they pay or return goods. The balance shows what they currently owe.
For example, a customer is invoiced RM900 and later pays RM600. Their account carries a debit balance of RM300, which forms part of trade receivables in the statement of financial position. All customer balances added together should agree with the control account total, which is a useful check on accuracy.
Do not confuse the sales ledger with the sales account. The sales account in the nominal ledger records total sales revenue for the period and feeds the income statement. The sales ledger tracks who owes money and how much, customer by customer.
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Related terms
Definitions here are general accounting explanations for study. For your board's exact wording, see its official syllabus via Sources.
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