Question

explain ledger step by step

Answer 1

In bookkeeping and accounting, a ledger is a book (or record) for collecting historical transaction data from a journal and organizing entries by account.

The ledger provides the transaction history and current balance in each accounting system account, throughout the accounting period. At the end of the period, ledgers, therefore, serve as the authoritative source of data for building a firm's financial accounting reports.

The Income statement is mostly a summary of account activity for the period in the firm's Revenue and Expense Accounts.

The Balance sheet is mostly a summary of the current balances in the firm's Assets, Liabilities, and Equities accounts, as they stand at the period end.

Sections below further define, explain and illustrate ledger. Note especially that the term appears in context with related terms and concepts, including the following:

General Ledger

Nominal Ledger

Journal

Daybook

Posting

T-account

Controlling Account

Accounting Cycle

Account

Chart of Accounts

Debit

Credit

Continuous Accounting

Sub-Ledger

Master Account