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Ledger and ledger accounts

In general journal, the transactions are recorded chronologically as they occur. Therefore, information regarding an account say “cash”, “building” or “accounts receivable” is scattered all over the journal. In order to get information regarding a particular account, accountants will have to search all the journal. To overcome this problem, accountants prepare records in a summarized and classified manner to show the results of all dealings with a particular account during a financial period. Record maintained this way is called an account.

Ledger (or general ledger) is a book in which all accounts relating to a business enterprise are kept. In other words, it is a collection or group of all accounts of a business enterprise.The accounts kept in ledger are sometime termed as ledger accounts. One account usually occupies one page in the ledger but if the account is big one, it may extend to two or more pages. All entries recorded in the general journal must be transferred to ledger accounts.

The ledger may be in a bounded form or loose leaf form. It is the master reference book of accounting system. It provides a permanent and classified record of every element in the business operation. Because of these features, ledger is sometime called the king of all the books of accounts.

What is posting?

The process of transferring information form general journal to the general ledger for the purpose of summarizing is known as posting. Entries relating to a particular account are all collected in that account, so its position may be known when needed.

Forms/types of ledger accounts

There are two popular forms of ledger accounts. These are:

  1. Standard form of ledger account
  2. Self balancing form of ledger account
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