Ledger - Principles of Accounting, Accountancy and Financial management Video Lecture | Accountancy and Financial Management - B Com

Leger what was the accounting process we
said first you have source documents
from where we get data about the
business transactions which we are going
to record in the books of a cup and we
record all this in the journal journal
is called a book of original entry
because transactions are first recorded
in the journal from the journal now we
are going to be ledger again I repeat a
very old definition of accounting was
that accounting is the art of recording
classified we have come to classifying
and summarizing so now we are coming to
the classifying portion book of original
entry which first time recorded but what
is the ledger this is the principal book
of accounts this is the main book the
principal book of accounts all accounts
are maintained in the ledger so what is
nature a ledger is first and foremost a
ledger is a book it is a book in which
the entire set of accounts is maintained
the purchase I found the sales account
the ex is account wise account capital
account drawings account service account
etc etcetera all accounts accounts are
kept in the nature what has happened is
we have recorded n number of
transactions in a chronological manner
in the journal now at the end of the
month if we are asked what is the total
purchases for the month we have to go
through several sheets of paper to
arrive at the total purchases of for the
particular month for the whole year it
is going to be still more so it is not
possible to really get information
quickly on total purchases on the total
amount due to XYZ on the total amount
receivable from ABC etcetera etcetera
etcetera so what we do is in a ledger in
a ledger we classify all the
transactions together that means all
purchases are put in one place all sales
is put in one place what is this place
it's a sales account all transactions
relating to sales is put in the sales
account all transactions relating to XYZ
is put in X Y Z's account in the ledger
all one's actions relating to ABC are
put in ABCs are found in the nature so
the ledger is a book which has the
entire set of accounts so all the enter
all the transactions are now classified
with all similar transactions all rent
in one place all sales in one place or
purchases in one place this one place
these are called respective accounts
purchase account sales account capital
account X Y Z etcetera etcetera so a
ledger is a book in which the entire set
of accounts is maintained it is called
the principal book of accounts what is
the format of a ledger a ledger has two
sides one is the debit side the left
side and the credit side each side has a
date of particulars a journal folio and
amount
what is this journal folio the page
number of the journal from which the
account is going to be posted here it is
posting posting when accounts when when
data from the journal is transferred to
the major that method the process is
called posting so ledger is a book it is
the principal book of accounts and
contains the entire set of accounts of
the business