(196)-NOMINAL LEDGER IN COMPUTERIZED SYSTEM

Nominal Ledger in Computerized System

The nominal ledger or general ledger is an accounting record which summarizes the financial affairs of a business. It is the nucleus of an accounting system. It contains details of asset, liabilities and capital, income and expenditure and so profit or loss. It consists of a large number of different accounts, each account having its own purpose or “name” and identity or code.

A nominal ledger will consist of a large number of coded accounts. A business will, of course, choose its own codes for its nominal ledger accounts.

It is important that a computerized nominal ledger works in exactly the same way as a manual nominal ledger, although there are some differences in terminology. For instance, in a manual system, the sales and debtors accounts were posted from the sales day book. But in a computerized system, the sales day book is automatically produced as part of the “sales ledger module”. So it may sound as if you are posting directly from the sales ledger, but in fact the day book is part of a computerized sales ledger.

Inputs to the nominal ledger

Inputs depend on whether the accounting system is integrated or not.

• If the system is integrated, then as soon as data is put into the sales ledger module (or anywhere else for that matter), the relevant nominal ledger accounts are updated. There is nothing more for the system user to do.
• If the system is not integrated than the output from the sales ledger module (and anywhere else) has to be input into the nominal ledger. This is done by using journal entries.
• Regardless of whether the system is integrated or not, the actual data needed by the nominal ledger package to be able to update the ledger accounts includes:
  1. Data
  2. Description
  3. Amount
  4. Account code

Outputs from the nominal ledger

The main outputs apart from listing of individual nominal ledger accounts are:

• The trial balance
• Financial statements