The ledger is the principal book of accounting system, containing the set of different accounts; real, personal as well as nominal accounts. It may be in the form of bound register or may be maintained in a loose leaf binder.


Importance of Ledger

A ledger provides the net result of all transactions in respect of a particular account on a given date. For example, to know the amount due from a certain customer or the amount the firm has to pay to a particular supplier, such information can be found only in the ledger which is very difficult to ascertain from the journal because the transactions are recorded in the chronological order and there is no classification. For easy identification, each account is allotted a code number.

Format of the account                

  Dr.                                            Name of the Account                                                              Cr.

Date Particulars J.F. Amount Date Particulars J.F. Amount
To Balance b/d



To Balance c/d*





By Balance b/d*



By Balance c/d





Total xxxx Total xxxx


How to make entry in an account

The information will be entered in the account as follows:

1. An account is debited or credited according to the rules of Double Entry.

2. Title of the account: The Name of the item is written at the top of the format with suffix ‘Account’.

3. Dr. /Cr.: Dr. means Debit side of the account i.e. left side and Cr. Means Credit side of the account, i.e. right side.

4. Date: Year, Month and Date of the transactions in chronological order in this column.

5. Particulars: In the Account to be debited, in particulars column on Debit side, write the name of account to be credited. In the Account to be credited, in particulars column of Credit side, write the name of account to be debited.

6. Journal Folio: It records the page number of the journal on which relevant transaction is recorded. This column is filled up at the time of posting (to be left blank by the students, if no specific information is given in this regard).

7. Amount: This column records the amount in numerical figure, corresponding to what has been entered in the amount column of the journal.

8. To/By: It is customary to write ‘To’ on debit side with particulars and ‘By’ on credit site.


Distinction between Journal and Ledger

The Journal and the Ledger are the most important books are indispensable for an accounting system but are different.

Journal Ledger
1. The Journal is the book of first entry (original entry). 1. The ledger is the book of second entry.
2. The Journal is the book for chronological record. 2. The ledger is the book for analytical record.
3. The Journal gets greater importance as legal evidence than the ledger. 3. The ledger, gets lesser importance as legal evidence than the journal.
4. Transaction is the basis of classification of data within the Journal. 4. Account is the basis of classification of data within the ledger.
5. The process of recording in the Journal is called Journalising. 5. The process of recording in the ledger is known as Posting.


Classification of Ledger Accounts

All ledger accounts are put into five categories namely, assets, liabilities, capital, revenues/gains and expense losses. All these accounts may further be put into two groups, i.e. permanent accounts and temporary accounts.

All assets, liabilities and capital accounts are permanent accounts , are balanced and carried forward to the next accounting period and appear in the balance sheet. All revenue and expense accounts are temporary accounts, and are closed at the end of the accounting period by transferring them to the trading and profit and loss account.

Posting from Journal

Posting is the process of transferring the entries from the journal to the ledger.

Posting from the journal is done periodically, may be, weekly or fortnightly or monthly as per the requirements and convenience of the business.

Balancing the Accounts

Accounts in the ledger are generally balanced at the end of the accounting period, with the object of ascertaining the net position of each account.

Balancing of an account means that after totaling the two sides the difference is put to shorter side in order to make their totals equal and the words ‘balance c/d’ are written against the amount of this difference.

In case the debit side total is more than the credit side total, the difference is written on the credit side and is called debit balance and, if the credit side total is more than the debit side total, the difference is written on the debit side and is credit balance.

The accounts of expenses losses and gains/revenues are not balanced but are closed by transfer to Trading Account and Profit and Loss Account.

The accounts of Real and Personal nature are balanced and taken to Balance Sheet.

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