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HMRC internal manual

Enquiry Manual

Examining Accounts: Accounting Systems: Nominal Ledger

The nominal ledger is the ‘keystone’ of the whole book-keeping system. It contains all non-personal accounts and is written up from the

  • cash book
  • petty cash book
  • purchase ledger
  • purchase day book
  • sales ledger
  • sales day book.

The sales and purchases accounts will be summaries, not details of individual invoices or accounts. Other accounts for expenses or assets may be entered in detail, the debits corresponding to credits in the cash book or purchase ledger.

Wages are dealt with through the cash book and wages account in the nominal ledger. There will also be a wages book, which is not part of the double-entry system but is a record of the payments to individual employees which should together add up to the total wages in the cash book. (Such detailed records may be maintained by the accountant or a separate agency.)

The accountant may tell you that the nominal ledger only exists in his or her working papers and so is not available to you. If it is not straightforward or clear you can ask the accountant to reconcile any figure in the final accounts to the business accounting records. This may involve informally requesting the ‘link papers’ - i.e. the papers prepared by the accountant which link the figures in the business accounting records to the figures in the final accounts.