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What is a Ledger Account?

What is a Ledger Account?
Extra $15 off on flights this Summer. Use the Coupon Code SUMMER15. Book Now! What is a Ledger Account? Ledger is a register with pages numbered consecutively. Each account is allotted one or more pages in the Ledger. If one page is completed, the account will be continued in the next page. An index of various accounts opened in the Ledger is given at the beginning of the Ledger for the purpose of easy reference. A general ledger is a complete record of financial transactions that holds account information needed to prepare financial statements, and includes accounts for assets, liabilities, owners’ equity, revenues and expenses. What is meant by Posting? Transactions recorded in the Journal and Subsidiary journal are transferred to the concerned accounts in the Ledger in a summarized and classified form. This process is called posting. “Interesting Statistics on Accounting The first book on double-entry accounting was written in 1494 by Italian mathematician and Franciscan friar Luca Bartolomeo de Pacioli. Although double-entry bookkeeping had been around for centuries, Pacioli’s 27-page treatise on the subject has earned him the title “The Father of Modern Accounting. Accounting plays a major role in law enforcement. The FBI counts more than 1,400 accountants among its special agents. The state of New York gave its first certified public accountant (CPA) exam in 1896. Rules for posting: Separate account should be opened in the Ledger for posting transactions relating to separate persons, assets, expenses or losses as shown in the journal. The account concerned which has been debited in the journal should also be debited in the Ledger. However, a reference must be made of the other account which is to be credited in the journal. In other words, in the account to be debited, the name of the other account to be credited is entered in the debit side for giving a meaning to this posting. The debit posting is prefixed by the word ‘To’. Similarly, the account concerned which has been credited in the journal has to be credited in the Ledger, but a reference should be made to the other account which has been debited in the journal. This posting is prefixed by the word ‘By’. Advantages of keeping a Ledger: Ledger provides information regarding all transactions of a particular account whether it is personal a/c, Real a/c or nominal a/c. The final effect, of a series of transactions of a certain customer or a certain property or a certain expense is known at a glance. Ledger provides immediately the totality of certain dealings. E.g., total purchases, Total sales, total expenditure, on a specified head. What is a Ledger account? Give a Proforma of a Ledger account. A Ledger account is nothing but a summary statement of all transactions relating to a person, asset, expense or income, which have taken place during a given period of time showing their net effect. Proforma of a Ledger account: Dr.                                                                                                                                                 Cr. ——————————————————————————————————————— Date      Particulars         J.F     Amount       Date       Particulars         J.F        Amount ——————————————————————————————————————— Year       To (the name               Rs. P             Year       By (the name...
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