Is Ledger Cash-Based or Accrual Accounting?
Or does that depend on how your accounts are setup?
If so, what is the difference in the account layout?
It can be both, but you won't use full-on cash-based anyway.
Plain text accounting tools are completely agnostic. They just track double-entry transactions as you write them. The choice depends entirely on how you structure your journal entries and when you choose to recognize your income and expenses.
BUT, accrual concept is pretty much necessary. I can give you detailed examples why that' the case, but It's best you learn more about accounting in general.
It depends on your accounts and journal entries. Cash or accrual - plaintextaccounting.org has some discussion and examples.
As others have noted, Ledger is cash/accrual agnostic.
Ledger, like other in the "PTA" software family, uses a transaction entry that is very similar to the paper general journal used in double entry accounting of a century ago.
There is one fundamental commonality: The amounts must always sum to zero in a "double entry accounting" transaction.
There are two major differences.
Difference 1: PTA uses signed amounts instead of the paper journal convention of recording only positive amounts (sign was implied by being in the "debit" or "credit" column). The approaches are equivalent, but it is often a source of confusion.
Difference 2: PTA software allows amounts to be expressed in different units called "commodities" instead of the single unit currency convention of the paper journal. Mixed unit summing is often a source of confusion.
My recommendations:
- Learn how the PTA sign convention maps to the debit/credit column convention of the paper journal.
- Use one commodity - your local currency (mine, for example, is US dollars)
By adopting these two recommendations, you can use the various PTA software (including Ledger) to mimic traditional paper accounting of a century ago - either cash or accrual.