Ledger book is popularly known asa)Secondary book of accountsb)Princip...
Ledger Book as Principal Book of Accounts
Definition of Ledger Book:
Ledger book is a book of accounts that contains the record of all the transactions of a business. It is a permanent record that helps in maintaining the current status of a company's financial position.
Explanation:
Ledger book is the principal book of accounts as it is the final destination of all the transactions recorded in the subsidiary books of accounts. It is also referred to as the book of final entry. It contains a summary of all the transactions that occurred during a specific period, categorized into different accounts like cash, bank, sales, purchases, and other relevant accounts.
Importance of Ledger Book:
Ledger book is important for the following reasons:
- It helps in maintaining accurate records of all the transactions.
- It is used to prepare the financial statements, like the balance sheet, profit and loss statement, and cash flow statement.
- It helps in tracking the company's financial position and performance.
- It also helps in identifying errors and discrepancies that may have occurred in the subsidiary books of accounts.
Other Books of Accounts:
Apart from the ledger book, there are other subsidiary books of accounts like cash book, sales book, purchases book, and journal book. These books are used to record specific types of transactions and are later summarized in the ledger book.
Conclusion:
In conclusion, the ledger book is the principal book of accounts that contains a summary of all the transactions recorded in the subsidiary books of accounts. It is an essential book of accounts that helps in maintaining accurate records, preparing financial statements, and tracking the company's financial position and performance.
Ledger book is popularly known asa)Secondary book of accountsb)Princip...
Bcoz it is frm ledger balances only that trial balance and final accounts are prepared .