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10 Ledger

The book in which accounts are maintained is called ledger. All transactions relating
to that account are recorded chronologically. It is the second step of Double Entry
Book-Keeping System in which transactions are recorded accounting head wise in
chronological order from journal. It is also called secondary entry. From journal each
transaction is posted to at least two concerned accounts - debit side of one account
and credit side of another account. In ledger, separate account is opened for each and
every accounting transaction as Cash A/c, Ram A/c, Rent A/c, etc.

A general ledger is a company's main accounting record. It is a complete record
of financial transactions over the life of a company. The ledger holds an account
information that is needed to prepare financial statements, and includes accounts for
assets, liabilities, owners' equity, revenues and expenses.
A general ledger is typically used by business that employs the double-entry
bookkeeping method - where each financial transaction is posted twice, as both a
debit and a credit, and where each account has two columns. Because a debit in one
account is offset by a credit in a different account, the sum of all debits will be equal
to the sum of all credits.

According to L.C. Croper– "The book which contains a classified and
permanent record of all the transactions of a business is called ledger."

So a ledger is a book of account: in which all types of accounts relating to assets,
liabilities, capital, expenses and revenues are maintained. It is a complete set of
accounts of a business enterprise.

Format of ledger

Ledger account which contains eight columns is divided into two equal parts. The first
four columns of left hand side represent the debit side and the other four columns of
right hand side represent the credit side. The format of ledger account is presented
below:

138 Office Practice and Accounting 9