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Ledger: Examples Video Lecture | Accountancy Class 11 - Commerce

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FAQs on Ledger: Examples Video Lecture - Accountancy Class 11 - Commerce

1. What is a Ledger?
A ledger is a book or a computerized record that contains all the financial transactions of a business. It serves as a central repository for recording and organizing all the monetary activities, including sales, purchases, payments, and receipts.
2. How does a Ledger work?
A ledger works by recording each financial transaction in a systematic manner. Each transaction is categorized into different accounts based on its nature, such as revenue, expenses, assets, liabilities, etc. The ledger then maintains separate pages or digital entries for each account, where the details of the transaction, including the date, description, and amount, are recorded. This allows businesses to track their financial activities and generate accurate reports.
3. What are the benefits of using a Ledger?
Using a ledger provides several benefits to businesses, including: - Accurate financial records: A ledger ensures that all financial transactions are properly recorded, minimizing the chances of errors or omission. - Easy tracking and analysis: With a ledger, businesses can easily track their income and expenses, making it easier to analyze their financial position. - Financial decision-making: Ledger records provide insights into the financial health of a business, enabling informed decision-making. - Compliance with regulations: A well-maintained ledger helps businesses comply with financial reporting requirements and tax regulations. - Audit preparation: Having a ledger simplifies the process of preparing for audits, as all financial transactions are already organized and documented.
4. What is the difference between a General Ledger and a Subsidiary Ledger?
A general ledger is the primary ledger that contains all the financial transactions of a business. It provides a summary of the company's financial activities and includes accounts such as assets, liabilities, equity, revenue, and expenses. On the other hand, a subsidiary ledger is a detailed ledger that supports the general ledger. It contains specific accounts related to a particular category or subsidiary, such as accounts receivable, accounts payable, inventory, etc. The subsidiary ledger provides more detailed information about the transactions in specific accounts, allowing businesses to track and analyze them separately.
5. Can a Ledger be used in personal finance management?
Yes, a ledger can be used for personal finance management. It helps individuals track their income, expenses, savings, and investments in a systematic manner. By maintaining a ledger, individuals can have a clear picture of their financial activities, identify areas of spending or saving, and make informed decisions to improve their financial well-being. Using a ledger can also simplify tax preparation and budgeting for personal finances.
82 videos|105 docs|42 tests

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