The Nominal Ledger is an important way of determining whether you are making a profit, simply by looking at two core figures – the amount of money received and spent.
The Nominal Ledger (also known as the General Ledger) is the main accounting record for any business using double-entry bookkeeping, usually listing accounts for current and fixed assets, liabilities, revenue and expenses, gains and losses. It is often divided into two sections – the left hand showing debit transactions and the right listing credit transactions.
As a business grows, it is likely to need more detailed information about which of its activities is profitable. This is why all data in the Nominal Ledger is allocated to an appropriate Nominal Account.
Each Nominal Account is given a unique Nominal Code so that it can be easily identified. Accounting transactions are then assigned with these Nominal Codes so that it is possible to view what has occurred in that area of the business over a set timeframe. Therefore, the Nominal Ledger is essentially a list of the Nominal Codes within your accounting structure.