Question

1.
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Define a ledger. Explain its importance and procedure of posting with suitable examples.​

Answer 1

Answer:

A ledger is the principal book or computer file for recording and totaling economic transactions measured in terms of a monetary unit of account by account type, with debits and credits in separate columns and a beginning monetary balance and ending monetary balance for each account.

Every ledger contains two sides: the left side shows debit entries while the right one depicts credit entries. Abbreviations of “Dr.” and “Cr.” on the top of the left and right sides respectively helps us identify them easily.

Secondly, every ledger relates to a particular person, asset, income or expense. Therefore, every transaction affects some ledger regardless of whether it is a real, personal or nominal transaction.

Thirdly, we can identify each ledger from the name of the concerned account. In order to do this, we have to write the name of each account on the top right in the middle.