Ledger.pptx
- 2. INTRODUCTION • The LEDGER is the principal book of accounting system. • It contains different accounts where transactions relating to that account are recorded. • A LEDGER is the collection of all the accounts, debited or credited, in the journal proper and various special journal.
- 3. UTILITY • A LEDGER is very useful and is of utmost importance in the organization. • The net result of all transactions in respect of a particular account on a given date can ascertained only from the ledger.
- 4. FORMAT OF LEDGER Account Title Account Code Date Particular REF. Debit Credit Balance
- 5. SAMPLE
- 6. DISTINCTION BETWEEN JOURNAL AND LEDGER • The journal is the book of origin; ledger is the book of final entry • The journal is the book for chronological record; ledger is the book for analytical record. • The journal as a book of source entry gets greater importance as legal evidence than the ledger. • Transaction is the basis of classification of data within the journal; account is the basis of classification of data within the ledger. • Process of recording the journal is called journalizing; the process of recording in ledger is known as posting.
- 7. CLASSIFICATION OF LEDGER ACCOUNTS • Ledger accounts are classified into five categories namely: ASSETS, LIABLITIES, CAPITAL, REVENUE/GAINS, AND EXPENSES/LOSSES. • All these accounts may further be put into two groups, i.e. permanent accounts and temporary accounts. • All permanent accounts are balanced and carried forward to the next accounting period. • The temporary accounts are closed at the end of the accounting period by transferring them to the trading and profit and loss account. • All permanent accounts appear in the balance sheet.