Meaning of Ledger
The term Ledger has been derived from the Dutch word “legger” which means “Ly”. Ledger is a book maintained to prepare different ledger a/c’s. After the preparation of the Journal Entry, we prepare a Ledger account. It is prepared to identify separate heads i.e., a separate account for each head. A ledger a/c is a summary statement of all the transactions related to one account. Ledger is the summary of a journal and it is called the king of books of accounts. A general ledger is also known as T Account. Ledger is considered a secondary record as it is derived from Journal. Ledger is a classified record.
Difference between Journal and Ledger
| Journal | Ledger |
|---|---|
| It is the book of original entry | It is the book of final entry. |
| Transactions are recorded on a daily basis | Transactions are recorded periodically. |
| The work of recording journal is called 'Journalizing'. | The work of recording in ledger is called 'Posting'. |
| We write narration for each entry. | We do not write narration in the ledger. |
| The source documents are vouchers, reciepts and bills. | The source document is JOurnal. |
| Journal is totaled. | Ledger a/c are totalled and balanced. |
| It has 2 columns debit and credit. | It has 2 sides debit and credit. |
| We have a column for Ledger Folio. | We have acolumn for Journal Folio. |
| We can't prepare a trial balance from Journal. | We can prepare a trial balance from Ledger. |
| We can't prepare a final a/c's from Journal. | We can prepare final a/c's from Ledger. |
| It does'nt give summary of one account. | It gives summary of each a/c. |
Format of Ledger account
| Dr. Cash a/c Cr. | |||||||
|---|---|---|---|---|---|---|---|
| Date | Particular | J.f. | Amount | Date | Particulars | J.f. | Amount |
| 1.1.2020 | To Capital a/c | 5000 | 2.1.2020 | By Purchases a/c | 2500 | ||
| 3.1.2020 | To Sales a/c | 3000 | 31.1.2020 | By balance c/d (Balancing Figure) | 5500 | ||
| 8000 | 8000 | ||||||
| 1.2.2020 | To balance b/d (Balancing figure) | 5500 | |||||
Note: C/d – Carried Down
B/d – Brought Down
