Ledger Balance

Ledger Balance

The sum of all transactions posted to an account in the general ledger, representing the recorded value of the account before any unposted items, uncleared transactions, or pending adjustments.

For example, a company’s cash account ledger balance of $45,000 represents the sum of all recorded cash receipts and disbursements posted to the general ledger, though it may differ from the available balance due to outstanding checks, pending deposits, or unrecorded transactions.

The ledger balance serves as the official book balance for financial reporting purposes, appearing in trial balances and forming the basis for financial statements. For balance sheet accounts, it represents the cumulative effect of all transactions since the account’s inception, while income statement accounts typically reset to zero after each reporting cycle through closing entries. In banking contexts, ledger balances differ from available balances by not reflecting holds, pending transactions, or uncleared items. Regular reconciliation processes compare ledger balances to external sources (like bank statements) or subsidiary records to ensure completeness and accuracy, identifying discrepancies requiring investigation or adjustment.