What does an accounting ledger primarily track?

An accounting ledger primarily tracks all financial transactions, which includes both income and expenses. This comprehensive record allows businesses or individuals to monitor their overall financial status. By maintaining a detailed ledger, one can see how much money is coming in, how much is being spent, and the overall balance over time.

This holistic approach ensures that financial activities are captured accurately, facilitating effective financial reporting and analysis. It supports budgeting decisions, profit and loss assessments, and serves as a fundamental tool in preparing financial statements and tax returns. Thus, tracking every transaction not only helps in maintaining records but also ensures that financial integrity is upheld, enabling informed decisions based on complete financial data.