How are transactions recorded in a ledger?

Transactions are recorded in a ledger through a systematic process known as double-entry bookkeeping, where each transaction affects at least two accounts—one account is debited and another is credited. Each entry includes details such as the date, description, amount, and account names to ensure clarity and accuracy. This method helps maintain the accounting equation (Assets = Liabilities + Equity) and provides a complete financial picture. Regular reconciliation of ledger entries ensures consistency and correctness in financial reporting.