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The ledger is rightly called the centerpiece of the accounting cycle. The accounting system and the firm's financial reports, after all, are "all about" the firm's accounts-their balances and transaction histories. The ledger is the authoritative source on this information, for all accounts. This section further describes the ledger's role in several steps of the accounting cycle.

Firstly, business transactions of many kinds occur, which must ultimately impact the firm's accounts. Earning revenues, incurring expenses, and many other transaction activities, are the first step in the accounting cycle.Secondly, transactions normally enter the accounting system as journal entries-the second step in the cycle. The journal records transaction entries chronologically, that is, in the order the occur.Thirdly, journal entries post to the ledger. The ledger organizes transactions by account, so as to show each account's transaction history and current balance.Fourthly, just before the end of the reporting period, accountants use account balances and transaction histories to create a trial balance. This primary purpose of cycle step is to check ledger accounts for accuracy by trial balance. This should show that total debits equals total credits across all accounts. They perform other kinds of error-checking at this time, as well, making corrections and adjustments when necessary.