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Friday, September 18, 2009

Objective or Importance or Advantages of Ledger:

A ledger is a principal book so that it has a great importance of achieving the goal of accounting and book-keeping. Some objectives may be as follows:
  1. Knowledge of debtor: A ledger gives the information to the proprietor about his debtor to whom he has sold goods on credit and amount due from him to be received.
  2. Knowledge of creditor: A ledger also discloses the amount to be paid to creditor from whom the business has purchased goods on credit.
  3. Knowledge of total sale and purchase: It helps to know total sales or purchases of a certain period through sales account and purchase account.
  4. Knowledge of expenses: For each head of expenditure, a separate account is opened. It helps to know the amount spent on different heads of expenditures.
  5. Knowledge of income: Like the expenses, ledger accounts also help to disclose the incomes generated by the firm during a certain period.

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