The sales ledger contains accounts of "trade debtors."
Trade debtors, also known as accounts receivable, are individuals or entities who owe money to a company for goods or services that have been sold on credit. When a business makes sales on credit terms, it creates an account for each customer in the sales ledger to track the amount owed by that customer.
The sales ledger serves as a record of all the credit sales made by the company. It includes information about the customers, such as their names, addresses, and outstanding balances. Each customer's account in the sales ledger shows the details of their purchases, payments, and any outstanding amounts.
By maintaining the sales ledger, a company can keep track of its outstanding receivables and monitor the payment status of its customers. This allows for effective credit control and helps in managing cash flow. The sales ledger also facilitates the process of sending invoices and reminders to customers for payment.
In summary, the sales ledger contains accounts of trade debtors, representing the individuals or entities who owe money to the company for goods or services sold on credit. It provides a comprehensive record of credit sales, customer details, and outstanding balances, enabling effective credit management and payment tracking.