Definition
A ledger account is a single entry within the Chart of Accounts. It tracks one specific category of financial activity — for example “Rent expense”, “Cash”, or “Accounts receivable”. Every debit and credit line in a journal entry references a ledger account. This is how all transactions are classified and how balances accumulate.Purpose
Ledger accounts classify every debit and credit in the accounting system. They let you track balances per category of financial activity and produce financial statements (balance sheet, P&L).Structure
Each ledger account has:- An account code (e.g.
610) - A name and optional description
- An account type: Asset, Liability, Equity, Revenue, or Expense
- A running balance updated by each journal entry that references it
Relationships
- Belongs to the Chart of Accounts of a specific folder.
- Referenced by journal entry lines (debit and credit sides).
- Referenced by invoice lines, which generate journal entries behind the scenes.
- Partners can have default ledger accounts for automatic posting.
Endpoints
Chart of accounts
The Chart of Accounts (CoA) is the complete, ordered list of all ledger accounts a company uses to record its financial transactions. Think of it as the index: the Chart of Accounts names and organizes every account, while each ledger account holds the actual transaction records and balances.Structure
- Accounts are organized by code or numbering range.
- Can be hierarchical: main accounts with sub-accounts.
- Includes account type classifications: Asset, Liability, Equity, Revenue, Expense.
- Can be customized per folder while following the general framework.
Relationships
- Each folder has exactly one Chart of Accounts.
- The CoA contains all ledger accounts for that entity.
- It is the foundation for financial statements (balance sheet, P&L).