Chapter – 4 | Ledger

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In the process of accounting, all the business transactions are recorded in chronological order in
Journal. These business transactions are recorded in proper books of accounts.

We are aware that all types of business transactions are recorded in Journal e.g. Transactions
related to assets, liabilities, expenses, income, cash or credit etc. At the end of the particular period if we want to know what is the total amount spent on particular type of expense, or what is the amount payable to particular person /party? These types of questions cannot be answered easily through Journal. So to overcome these limitations of Journal we need Ledger.

A Ledger is called as the main Book of Accounts. Once the transactions are recorded in
Journal or Subsidiary books the next stage is the transfer of those transactions in their respective
accounts opened in the Ledger.

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