Sales Ledger vs Purchase Ledger
 

As sales and purchase ledgers are two of the sub-ledgers used in the practice of accounting, it is useful to know the difference between sales ledger and purchase ledger. Sales ledger and purchase ledger can be identified as two sets of sub-ledgers used to record detailed sales and purchases data. The main aim of maintaining these different ledgers is to facilitate decision making, providing the management with the required, detailed information regarding sales / purchase amounts, income and expenses flows and to determine the current due from and to the debtors and creditors.

What is Sales Ledger?

Sales ledger that falls under the system of accounts, always records all credit sales transactions of a particular organization. Main purpose of maintaining a ledger is to record and monitor debtors of the business. Sales ledger consists of numerous individual accounts preserve for different debtors along with the general details of credit sales such as sales invoice numbers, names of the customers, VAT, freight charges, amount of sales, payment terms, etc.

Sales ledger is a planning tool itself. It enables managers to monitor and pursue the debtors who do not pay according to the purchase terms and also helps to identify profitable customers.

What is Purchase Ledger?

Purchase ledger is a book of accounts that records all credit purchase transactions of an organization. Main aim of maintaining a purchase ledger is to keep detailed purchase records and monitor creditors. It contains individual accounts of different creditors and other central information such as receipt numbers, VAT, purchase order numbers, payment period and payment terms.

Similarities between Sales Ledger and Purchase Ledger

• Both sales and purchase ledgers are considered as an internal database, usually maintained by the accounting department.

• Detailed information enclosed in these two types of ledgers are summarized at the end of a particular period (often monthly) and records in respective control accounts through general ledger.

• Information comprised in sales ledger and purchase ledger helps to reconcile the creditors and debtors status with the balance of respective control accounts.

What is the difference between Sales Ledger and Purchase Ledger?

• Sales ledger is also known as the sales sub-ledger while purchase ledger is also known as the purchases sub-ledger.

• Sales ledger records credit sales transactions. Purchase ledger records credit purchase transactions.

• Sales ledger is used to record and monitor debtors. Purchases ledger is used to record and monitor creditors.

• Sales ledger source documents consist of sales invoices and debit notes/ memos. Purchase ledger source documents consist of supplier invoices and credit notes/ memos.

• In sales ledger normally, there is a debit balance. In purchase ledger there normally is a credit balance.

• The final amount of the sales ledger is transferred to the sales ledger control account via general ledger. Meanwhile, the final amount of the purchase ledger is transferred to the purchase ledger control account via general ledger.

Both sales and purchase ledgers are used in recording and monitoring large numbers of regular transactions in an organization. Sales ledger deals with the credit sales and debtors. In contrast, purchase ledger records credit purchases transactions and creditors’ information. At the end of a specific period, these ledgers are summarized and the total amounts are recorded in respective control accounts.

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