How to Reconcile an Accounting Ledger
An accounting ledger is a critical piece of a company's financial reporting system since a company's economic transactions are all eventually posted to the ledger. It is important to reconcile the debits and credits sides of a ledger in order to ensure that the ledger balances properly. The accounting ledger is ultimately used to produce important financial reports, which will be inaccurate if the ledger entries are incorrect. Consequently, understanding how to reconcile an accounting ledger is extremely important for people working in a company's accounting or finance department.
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Instructions
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Collect all necessary paperwork for the business transactions that need to be reconciled in the accounting ledger.
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Enter the data from each transaction into a spreadsheet in Microsoft Excel. Put debit amounts in a column to the left and credit amounts in a column to the right. Also type a brief description of each transaction next to the debit and credit columns. This will allow you to quickly associate each entry with a specific transaction.
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Add up the debt and credit amounts at the bottom of each column. Compare the total debits to total credits to make sure the numbers are the same. If the numbers are different, create a column titled "stockholders' equity" and enter the difference (with the appropriate sign to get the ledger to balance). The basic accounting formula is that assets (credits) = liabilities (debits) + stockholders' equity. If credits equaled $100 and liabilities equaled $120, you would enter -$20 in the stockholders' equity column.
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Open the general ledger application in your company's accounting software, and enter the debit and credit information from your Excel spreadsheet.
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Print out a summary of your general ledger entries (before posting them), and compare the entries with the entries on your spreadsheet. You may also want to check one or two of the general ledger entries against the paperwork for the transaction.
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