What is ledger. And how many types in there

Question

Accepted Answer

A ledger is a book or computer program used to record financial transactions. There are two types of ledgers: general and subsidiary.

A ledger is used to keep track of financial transactions.
It can be in the form of a physical book or a computer program.
There are two types of ledgers: general and subsidiary.
The general ledger contains all the financial transactions of a company.
The subsidiary ledger contains specific accounts, such as accounts receivable or accounts payable.

Accepted Answer

A ledger is a book of entries that contain detailed information of transactions of one account or type of transaction or a summary of all the financial transactions of a company for a specific period.

1 Sales Ledger

2 Purchase Ledger

3 General Ledger

Accepted Answer

All the Accounts recognized based on transactions recorded in different journals will be opened and maintained in a separate book called Ledger.

1. General Ledger-

A general Ledger is the master collection of all the Accounts that summarize all transactions occurring within an enterprise. There may be a small set of Ledgers that fall under the general Ledger. The general Ledger is used to record all the transactions in the financial statements of the business.

It comprises a debit and credit entry for every transaction recorded into it, to match the total debit and credit balance. It has to match to prepare the financial statements from it.

They are of two types-

A. Nominal Ledger- As the name suggests it contains all nominal Accounts i.e. expense, losses, incomes and gains. Examples – Salaries, Sales, Purchases, Returns Inward/Outward, Rent, Stationery, Insurance, Depreciation, etc.

B. Private Ledger- Private Ledger consists of Accounts that are confidential such as capital, drawings, salaries, etc. These Accounts are only accessible by selected individuals.

C. 2. Purchase Ledger

D. Purchase Ledger records all the transactions the company has done with the suppliers. It shows which purchases are paid and which are outstanding. If the purchasing volume is relatively low, then there is no need for a purchase Ledger. Instead, this information is recorded directly within the general Ledger.

E. Each Account will generally have a credit balance and this shows the amount owed to a supplier by the business. The Sum of all the money owed by a business to its suppliers is known as Accounts payable.

F. 3. Sales Ledger-

G. If the business just has one customer, it will not need to maintain a sales Ledger but just one Account in the Nominal Ledger will be enough. But, many businesses sell in credit and have many customers, for them maintaining a sales Ledger is very important.

H. This Account records all the transactions in which the goods have been sold to the customer in credit. The Sum of all the money which has been given on credit is called Accounts receivable.

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