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Ledger
A Ledger is a book which contains all the accounts whether personal, real or nominal, which are first entered in journal or special purpose subsidiary books.
According to L.C. Cropper, ‘the book which contains a classified and permanent record of all the transactions of a business is called the Ledger’.
Ledger is a principal or main book which contains all the accounts in which the transactions recorded in the books of original entry are transferred. Ledger is also called the ‘Book of Final Entry’ or ‘Book of Secondary Entry’, because the transactions are finally incorporated in the Ledger.
The following are the advantages of ledger.
i. Complete information at a glance:
All the transactions pertaining to an account are collected at one place in the ledger. By looking at the balance of that account, one can understand the collective effect of all such transactions at a glance.
ii. Arithmetical Accuracy
With the help of ledger balances, Trial balance can be prepared to know the arithmetical accuracy of accounts.
iii. Result of Business Operations
It facilitates the preparation of final accounts for ascertaining the operating result and the financial position of the business concern.
iv. Accounting information
The data supplied by various ledger accounts are summarised, analysed and interpreted for obtaining various accounting information.
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