We have explained the whole topic of the ledger in the following parts to understand to proper meaning and utilization of it in financial accounting.
What is Ledger:
Ledger is a book in which we record all business transactions of each and every account in a separate ledger account. In other words, It is the summary of the single account. So we have to create a separate ledger for each and every account which are already created while recording journal entries.
These accounts are maintained in alphabetical order. With the help of the ledger accounts, we can get whole information about any particular account because all the related journal entries to the particular account are posted on the continuous pages of this book.
In the ledger accounts, we have to record date wise transactions related to a particular account, but in the journal, all the transactions are recorded only date wise and the name of the account has ignored. So if we want to know the balance of a particular account then it is very difficult to get it from Journal because we have to check and find out all transactions related to the particular accounts from all pages of the journal daybook.
Ledger accounts also have opening and closing balances but the journal doesn’t have.