What is Ledger

What is Ledger

A ledger is an accounting book that facilities the transfer of all journal entries in a chronological sequence to individual account.

Types of Ledger:


1) General Ledger:    The general ledger accumulates information from journals. Each month all journals are totalled and posted to the general ledger. The purpose of general ledger is therefore to organise and summarise the individual transactions listed in all the journals.

2) Debtors Ledger:    The debtor ledger accumulates information from the sales journal. The purpose of the debtors ledger is to provide knowledge about which customers owe money to the business and how much.

3) Creditors Ledger:  The creditors ledger accumulates information from the purchases journal. The purpose of the creditors ledger is to provide knowledge about which suppliers the business owes money, and how much.

Importance of Ledger:

* Transactions relating to a particular person, item or heading of expenditure or income are grouped in the concerned account at one place.

* When account is periodically balanced it reflects the net position of that account.

* Ledger is the stepping stone for preparing Trail Balance.

* Ledger is the destination of all entries made in journal or sub journal.

* Ledger is the store house of all information which subsequence is used for preparing final accounts and financial statements.