Debit Side We know that a liability is any money owed by a business. Liabilities can be current or fixed.
• A current liability is money that is owed by the business within one year. For example, a bank overdraft or money owed to creditors (i.e. suppliers who sold the business goods on credit).
• A fixed liability is money that is owed by the business over a term of more than one year. For example, a 10-year loan or a mortgage.
Income is any money that the business earns. Gains are any other sources of income for the business.
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A general ledger is a record of an organisation’s transactions over a period of time. It includes accounts for assets, expenses, income, gains and liabilities.
General ledger credit and debit entries
Go to page 152 of your Activities and Accounts Book to identify assets, expenses, income/gains and liabilities.
The following general ledger template shows which side the different totals are recorded on. DR
