Characteristic of Ledger

Characteristics of Ledger

1.    Classification

Ledger is used to classify the recorded transactions. Ledger is also known books of secondary entry. Transaction information is divided into different accounts; these accounts are opened on the bases of functions.

2.    Contains Accounts

Ledger contains all accounts i.e. sales account, purchases account etc, in simple word ledger is a book or register, which contains all accounts. Account is opened in ledger at the time of start of business (expectation bases) or during the year (need bases).

3.    Specific Information

Ledger facilitates specific information about a particular account. For example if we are interested in sales figure, we can see the sales account.

4.    Speedy tracking

Ledger facilitates speedy tracking of financial transactions. For example if you need to track a voucher related to a customer, then you can track it simply by opening the account page of that customer from ledger. In account page you can easily track the voucher.

5.    Facilitates Summaries

Ledger facilitates financial statement preparation. In first place trial balance is extracted from the ledger, and then financial statements are prepared from the trial balance. It is important to remember that trial balance is summary of closing balances of accounts.

6.    General Ledger & Subsidiary Ledger

General ledger contains account of element which has limited transaction, while subsidiary ledger contains large number of account i.e. customer ledger, supplier ledger. General ledger also contains a total account for these items.