Transactions that may be related to any particular individual, items or income are actually organized into a concerned account and can later on glance at one place.

It is important to maintain ledger in every accounting system. It becomes an absolute necessary and comes up with various advantages:

  • Double entry system: It gets completed only in case the journals are posted into different ledger accounts.
  • Maintain classified accounts: The particulars of any classified accounts can get revealed only after it is recorded in ledger account.
  • Presentation of statistical information: The ledger accounts come up with respective balances and it reflects statistical information which can later be viewed by management while taking any decision in business.
  • Keeping permanent record: Through ledger account it is possible to maintain a permanent record of financial transaction which occurs in a highly classified manner.
  • Prepare trial balance: It allows in preparing trial balance so that it becomes possible enough to check any arithmetical accuracy which can occur due to recording of financial transaction.
  • Prepare balance sheet: You can possibly make balance sheet as it is easier to view financial position of company.

When the business balances each account from time to time, it becomes quite prominent that net position of account can be checked. Ledger is the only way through which all kind of entries can be made in journal and sub-journals.


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