Ledger Account

A ledger in accounting refers to a book that contains different accounts where records of transactions pertaining to a specific account is stored. It is also known as the book of final entry or principal book of accounts. It is a book where all transactions either debited or credited are stored.

A ledger account is a combination of all the ledgers and contains information related to all the accounting activities of an organisation. It is regarded as the most important book in accounting as it helps in creating a trial balance that acts as a precursor to the preparation of financial statements.

The information stored in a ledger account contains both starting and ending balances which are adjusted during the course of the accounting period with respective debits and credits.

A ledger contains different components which include the various transaction elements such as date, amount, particulars and l.f (ledger folio). Individual transactions are contained within a ledger account and are identified by a transaction number or any other type of notation.

Ledger Format

The ledger consists of two columns prepared in a T format. The two sides of debit and credit contain date, particulars, folio number and amount columns. The ledger format is as follows.


Ledger Account Example

Following are some examples of ledger accounts

  1. Accounts receivable
  2. Cash
  3. Depreciation
  4. Accounts payable
  5. Salaries and wages
  6. Revenue
  7. Debt
  8. Inventory
  9. Stockholders’ equity
  10. Office expenses

Ledger Posting

The process of transferring entries from a journal to the respective ledger accounts is known as ledger posting. For this process, first, the entries are recorded in journals and then transferred to their respective ledger accounts.

This was all about the topic of Ledger Accounts. For more of such concept articles encompassing Accountancy, Economics and Business Studies subjects for Commerce, stay tuned to BYJU’S.

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