Top ads from clicksor

Friday, September 18, 2009

Ledger Account

Meaning of Ledger:
Journal as we have discussed in previous chapter, is a chronological record of business transactions which does not record relating to a particular subject, thing or person at a place if they occur on different dates. To avoid such limitation of journal, a statement is prepared to collect all the transactions of same nature at one place which is called 'ledger'. In other words, a ledger is a book of recording transactions in a classified way according to their nature and type.

According to Mukharji and Hanif "The ledger is the principal books of accounts where similar transactions relating to a particular person or thing are recorded." From this definition, we know that a ledger is a principal book of account. All similar transactions are collected at a place. For example, transaction relating to cash are assembled under a ledger i.e., cash account. A separate account is opened for a particular transaction generally on a separate page or sheet.

Before preparing the ledger, journal entries must be passed. For every journal entry, one ledger account is to be debited and another is to be credited. Such process of transferring the transactions which have been previously recorded in the journal into the appropriate ledger accounts is called "Posting".

No comments:

Post a Comment

Your Luck Goes Here

Search your luck

Search Term:


Add to Technorati Favorites