What
is ledger?
Ledger is book contains
the individual account. Ledger is a book of secondary entry and used to
classify the transactions.
What
are types of ledger?
There are two types of
ledger i.e. subsidiary ledger and General ledger. The subsidiary ledger
contains the individuals’ accounts of customer and creditor known as accounts
receivable, account payable. This ledger contains all the accounts of
receivable & payable respectively.
What
is purpose of subsidiary ledger?
Subsidiary ledger is
maintained to manage the volume of transactions and to divide the work load in
the account department. It is not practical to maintain too many accounts in
General ledger and therefore some subsidiary ledger are created for purpose.
What
is General Ledger?
The general ledger contains
the separate account for those head have low volume of transaction like salary, rent etc and contains total account for heads involves high
volume of transaction like receivable, payable, credit purchases, credit sales.
Those account which involves
low volume of transaction; General ledger is updated for individual transaction,
and for high volume transaction heads, General ledger is updated in total term.
Special Journals like sales journal and
purchase journal provides information for updating of General ledger in total
term. The General Journal provides information for updating individual accounts.
What
types of total account General ledger?
The accounts which are
updated with total amount include Account receivable, Account payable, credit
sales, credit purchases. The total accounts are updated from the sales journal,
purchase journal and cash books in total term, while the subsidiary ledger is
updated from these books on individual bases.
What
is purpose of maintain General Ledger?
General ledger provides
readily available information for the preparation of financial statement.
General ledger concept was related to the manual books of account for
facilitation of preparation of financial statement.
