Ledger

What is Ledger 

Ledger basically a book which contain all accounts . Ledger is more like a register of accounts. For example ledger contains the sales accounts ,purchases account, salary account.  Ledger and accounts are two different things .

 Accounts are the appropriate heads of the transaction and ledger is a book which contains those accounts. In simple words the accounts are pages of the book and the book is ledger.

What are Types of Ledgers

Ledger can be classified into two types General Ledger and Subsidiary ledger. 

1.General Ledger 

General Ledger contains individual accounts and also control account of individual like account receivable and account payable. General Ledger is form the basic part of books of account of the entity.

2. Subsidiary Ledger

 Subsidiary ledger basically memorandum records and contains the individual accounts detail transactions. Subsidiary ledger are updated on real time bases

Advantages of Ledger

1. Facilitate Classification

 ledger is first classification of accounting transaction into the appropriate accounting heads. Ledger give you a details analyses of activity in a accounting heads.

2. Fast Tracking of Transaction

  Ledger is also provide a fast tracking of transaction. for example if you want to track a sales transaction then you would prefer to open sales account form the ledger to find out the transaction details.

3. Trial Balance Preparation

 Trial balance is basically a summary of transaction of ledger accounts that is prepared from the closing balance of General Ledgers accounts. In absence of ledger it is technically not possible to prepare Trial Balance.