Article 5 of the Saudi Commercial Books Law

This article concerns the general ledger, the third of the books that Article 1 requires as a minimum.

While the original journal records operations by the date they occur, day by day, as in Article 3, the general ledger organizes these operations by their type. The article provides that:

• Financial operations of the same nature are carried over (that is, transferred) from the journal to the general ledger.
• The carrying over is done in a way that allows the result of each account to be drawn out separately.
• And this is to be possible easily and at any time.

The practical meaning is that the merchant must be able at any moment to know the balance of each account independently of the others, such as the sales account, the purchases account or a particular customer's account, without having to review all the daily entries one by one.

The article does not specify which accounts must be opened or how they are to be classified; it sets the standard: that similar operations be grouped and that the result of each account be clear and easy to extract. The inventory book, which Article 4 deals with, complements this.

Anyone who needs an opinion on organizing their accounts under this article can consult an accountant or a lawyer specializing in commercial and company cases.