Ledger

Explanation: A ledger is a detailed record where bookkeeping entries are recorded by account. The ledger shows how each transaction affects individual accounts and is a key component of a company’s accounting system.

Example: The sales ledger in your flower shop keeps track of all sales transactions.

Potential Issues: Inaccuracies in ledger accounts can lead to misstated financial reports. For instance, overstatement of revenue or understatement of expenses in the ledger will misrepresent the profitability and financial position of the business.