Accounting Ledger
In this web primer we will also
discuss:
Ledger is the most
important book of accounting. It contains summarized, classified description of
all the business transactions. It is divided into various parts and each part is
termed as 'account'. It is necessary to gather at one place all transactions,
during the period, relating to a particular subject-a person, a thing, a class
of expenses, incomes etc. It is only then that the net results can be
ascertained.
Thus the first step in the
procedure of recording transactions is to journalize and the second step is to
post the transactions in the ledger. Ledger is known as the 'principal or chief'
book of accounts. In ledger the financial information is classified by its
nature and relevance.
The statement which records the
transactions at one place relating to a particular subject is known as account.
The book which contains all the accounts is known as ledger and the procedure of
writing up the accounts is known as posting.
The ledger is the most important
book of account and is the destination of the entries made in the Journal or
Sub-divided Journals. It is a collection of all the three types of
accounts --Personal, Real and Nominal. If you are faced with questions
like:
- How much a particular customer
owes you?
- What is the amount payable by you
to anyone of your suppliers?
- What is the amount of goods
purchased by you during specific period ?
- How much sales you have affected
during, say, last three months?
- What has been your expenditure
on, say, labor during the period?
Then the quicker and easier way of
ascertaining the relevant information is to turn to your ledger, find out the
balance of the Customer's A/c or Supplier's A/c or Purchases A/c or Sales A/c or
Wages A/c.
