LEDGER
1.1
Meaning & Definition
1.2
Utility of a Ledger
1.3
Format of a Ledger Account
1.1
Meaning and Definition
Ledger
is a principal book of accounts of the enterprise. It is rightly called as the
'King of Books'. Ledger is a set of accounts. Ledger
contains the various personal, real and nominal accounts in which all business
transactions of the entity are recorded. The main function of the ledger is to
classify and summarise all the items appearing in Journal and other books of
original entry under appropriate head/set of accounts so that at the end of the
accounting period, each account contains the complete information of all
transaction relating to it. A ledger therefore is a collection of accounts and
may be defined as a summary statement of all the transactions relating to a
person, asset, expense or income which have taken place during a given period
of time and shows their net effect.
A
Ledger Account may be defined as a "Summary Statement of all transactions
relating to a person, asset, expense or incomes which have taken place during a
given period of time and showing their net effect." From the above
definition, it can be concluded that Ledger is designed as the book of second
stage in the accounting cycle which is used for recorded transactions which are
classified and grouped into different heads of accounts.
1.2
Utility of a Ledger
The
main utilities of a ledger are summarized as under :
(a) It
provides complete information about all accounts in one book.
(b) It
enables the ascertainment of the main items of revenues and expenses
(c) It
enables the ascertainment of the value of assets and liabilities.
(d) It
facilitates the preparation of Final Accounts.
1.3
Format of a Ledger Account
The
specimen of ruling of each account in the ledger is as follows:
Date
|
Particular
|
J.F.
|
Amount
(Rs)
|
Date
|
Particular
|
J.F.
|
Amount
(Rs)
|
Year
Month
Date
|
To
(Name of Credit Account
in
Journal)
|
Year
Month
Date
|
To
(Name of Dedit Account
in
Journal)
|
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