About the RocketKOR Ledger
How Does RocketKOR Manage Financial Accounts?
RocketKOR employs a comprehensive accounting system to record transactions and manage Financial Accounts. This system, which is based on the double-entry accounting method, performs functions such as:
- keeping detailed and immutable transaction records
- tracking account balances
- facilitating the reconciliation of RocketKOR Financial Accounts and externally managed financial accounts
- enabling financial auditing
What Are the Journal and Ledger?
RocketKOR uses a journal and ledger system to record accounting entries. The journal captures transaction activity across all RocketKOR Financial Accounts, recording each transaction as it occurs. The journal entries are then transferred to a series of ledgers that categorize and organize this information. These concepts are described in more detail in the following sections.
The journal (also called the book of original entry) contains a chronological record of every transaction that takes place on the RocketKOR platform. Transactions are recorded daily and are listed in the order in which they occur.
The journal tracks the movement of funds (pending and actual) based on the processing status of each transaction. A journal entry is generated every time a transaction’s status changes, such as when the transaction is created, approved, settled, or cleared. The journal entry contains information such as the transaction ID, date, amount, description, debit account, and credit accounts.
The ledger (also called the book of second entry or the principal book of accounts) is used to track account balances using double-entry accounting. The ledger contains the chart of accounts, which is a complete list of active RocketKOR Financial Accounts and their related Business Accounts. While journal entries appear in chronological order, ledger entries are organized by Financial Account.
Journal entries are transferred to the ledger where they are classified, summarized, and posted as debits and credits to the appropriate Financial Accounts.
The double-entry accounting method requires that every financial transaction is recorded as both a debit and a credit. As a simple example, when funds are transferred between accounts, a debit is recorded for the account that received the funds and a credit is recorded for the account that transferred the funds. The debits and credits for a transaction must always balance. The total debits and credits for all of the accounts recorded in the ledger must also balance.
RocketKOR maintains a series of ledgers, including ledgers for each Business Financial Account, Master Settlement Account (MSA), and Sponsor account. The General Ledger summarizes all of these ledgers into a single view.
How Are Account Balances Calculated?
The journal and ledger system provides real-time insight into the funds within a RocketKOR Financial Account. The following balances are calculated for each Financial Account. These balances are calculated and maintained as running balances, based on the relevant journal and ledger entries.
- Account Balance Actual balance of the account. This balance includes any pending withdrawals and excludes any pending deposits.
- Available Balance Available funds in the account that can be used for transactions. The available balance is calculated as the account balance minus any pending withdrawals.
- Pending Withdrawals Total value of outbound funds submitted for processing that have not yet settled.
- Pending Deposits Total value of inbound funds submitted for processing that have not yet cleared.
Account balances can be accessed on the RocketKOR Portal and via the RocketKOR APIs.
How Are Transaction Adjustments Processed?
A transaction adjustment can be recorded if there is an error with a transaction, such as entering an incorrect transaction amount. This will create an “Adjustment” transaction type for the relevant Financial Account(s). Adjustment transactions are recorded in the journal and ledger system.
All adjustments are processed by the RocketKOR Operations team.