What about ledger account
According to B.G. Bikari: “Ledger is the most important book of accounts. All the transactions are recorded in it in brief and form of classification. It is divided in different sections which are called accounts. Generally one page is given for every account in it though it may be taken to two or more than two pages, and it may also happen that more
than one account are written on one page. There is always a serial number on every page. Any account can be searched easily on the basis of its index.”
Meaning of Ledger
Ledger is the most important book of business. After recording the entries of all transactions in journal they are classified. This classification is done in ledger. The accounts of transactions are recorded datewise in journal, from it allnthe information about any transaction can not be got on one place only. To see journal it can not be found out that what is to be taken from any person after a definite time? What is to give to whom? What is-the value of every assets of business? What is the expenditure on which item? What is the amount of sales and purchases, etc.? All answers of these questions can be got easily and quickly from ledger because every personal, nominal and real accounts are opened separately in ledger, all transactions related to them are written on one place. From the balances of different accounts of ledger final accounts are made and from those the results of business may be got.
In this way in general meaning ledger means such a book of writing in which separate account are opened for all persons/firms, institutions, companies, things and items of income-expenditure which are dealing, and these accounts are written collectively related to those transactions. Generally one page is fixed for every account, though it may be taken to two or more-than two pages also. Sometimes this may also happen that many accounts are recorded on one page only. Thus a list of all accounts or index is made on the first two-three pages of ledger.
Necessity of Ledger
Ledger is the most important book among the books of transactions and it is prepared from the accounts given in Journal or its subsidiary book. Businessmen can get manyninformation related to their business very easily in a shortntime through it. The importance and necessity, of ledger cannbe explained through these benefits
(i) Saving of time and labour-Due to making of ledger all the informations related to an account are available at one place only which saves time and labour both..
(ii) Knowledge of business results- There is profit or loss in business, it can be found out by making trading and profit and loss account. The trading and profit and loss accounts are prepared on the basis of ledger.
(iii) Knowledge of liability and assets- With its help position of assets and amount of liabilities can be known easily.
(iv) Necessary information- With the help of ledger income-expenditure, debtors, creditors and many necessary information related to business are easily available.
(v) Possibility of checking numerical correctness-
By making trial balance from the balances of all accounts of ledger it is found out that the accounts opened in ledger are maintained properly or not.
(vi) Easy to make Trial balance- There is convenience in making trial balance from ledger which is helpful in making trade accounts, profit and loss accounts, and balance sheet.
(vii) Acts as an evidence in court- This book works as an evidence in Financial disputes in court.