Journals indicate which ledger accounts to debit and credit.
The value will be entered twice into the accounts.
Once as a debit in one account, and once as a credit in another account.
A bookkeeper needs to learn how to process debits and credits to ensure the ledgers are accurate.
It is not that difficult because there are only five main account categories within the ledgers, so only five to learn.
For example, one main ledger category is expenses. They are always debited when money is spent on an expense. The opposite credit entry will be made in the bank account which can be found in the assets ledger category.
It is important for bookkeepers to know which accounts to debit and which to credit.
There is a mathematical formula to support this
It is called the accounting equation and it maintains the structure of the ledgers.
Learning this simple equation by heart can help a bookkeeper to remember the rules of debits and credits.
it is from the bookkeeping ledgers that the totals are tallied, balanced and used to produce various business reports.
A Trial Balance is used to ensure all the ledgers do balance.
What is a Trial Balance?
The Trial Balance is used to ensure that all the debit ledger accounts add up to the same value as all the credit ledger accounts. You can read more about the Trial Balance here.