Accountancy: Features, Advantages and Types of Ledger, Posting Of Journal Proper Into Ledger

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  • In Journal all the financial transactions are recorded for the first time. Companies will maintain individual accounts to know transactions in short time. Those individual accounts are known as Ledger.

  • Example: Sale of goods takes place number of times in a year. All those transactions can be seen at one place i.e., Sales Account Ledger.

  • So, Ledger is a book of account in which all types of accounts relating to assets, liabilities, capital, expenses and revenues are maintained.

Features of Ledger

  • Ledger is an account book that contains various accounts

  • Ledger is a book of final entry because all transactions in journal are posted into ledger.

  • Ledger maintains accounts relating to Assets, Liabilities, Capital, Revenue and Expenses.

  • It is permanent record of all business transactions.

  • It is the reference book of accounting system. It is used to prepare financial statements.

  • At the end of the accounting period each account will contain the entire information of all the transactions.

Format of a Ledger Sheet:

Title of an Account

Dr. Cr.

Table Supporting: Features of Ledger

Tablutation of: Date, Particulars, J.F., Amount (Rs.), Date, Particular, J.F, Amount(Rs.)




Amount (Rs.)





Note: A full sheet page may be dedicated to one account. One or more accounts can be opened on one sheet depending on number of transactions involved.

Advantages of Ledger

  • Ledger provides instant information regarding different transactions.

  • It provides detailed information about revenues and expenses

  • It provides value of every asset and liability separately

  • It provides useful information to the management in preparing budgets and policies.

  • It provides information for the preparation of financial statements.

  • It helps in knowing the health of the business with the help of financial statements.

Types of Ledger

Based on kind of business transaction ledger can be classified into seven major categories. Those are –

  • Assets Ledger: It contains accounts relating to assets only e.g. Machinery accounts, Building account, Furniture account, etc.

  • Liabilities Ledger: It contains the accounts of various liabilities e.g. Capital (Owner or partner), Loan account, Bank overdraft, etc.

  • Revenue Ledger: It contains the revenue accounts e.g. Sales account, Commission earned account, Rent received account, interest received account, etc.

  • Expenses Ledger: It contains the various accounts of expenses incurred, e.g. Wages account, Rent paid account, Electricity charges account, etc.

  • Debtors Ledger: It contains the accounts of the individual trade debtors of the business. Individuals, firms and institutions to whom goods and services are sold on credit by business become the ‘trade debtors’ of the business.

  • Creditors Ledger: It contains the accounts of the individual trade Creditors of the business. Individuals, firms and institutions from whom a business purchases goods and services on credit are called ‘trade creditors’ of the business.

  • General Ledger: It contains all those accounts which are not covered under any of the above types of ledger. For example Landlord A/c, Prepaid insurance A/c etc.

Posting of Journal Proper into Ledger

All the transactions which are recorded in Journal will be carried to different individual accounts i.e., ledger. The transfer of entries from journal to relevant account in the ledger is called as posting of journal entries into ledger. The procedure for posting into ledger is –

  • Firstly, identify the accounts of the journal entry. Open those accounts in the ledger.

  • All the transactions associated with that particular account will be posted in ledger.

  • Enter the date, particulars and amount.

Note: If the account in journal is credited that should be entered in debit side of the ledger by placing ‘To’ in front of account. If the account in journal is debited that should be entered in credit side by following ‘By’.

  • Write the page number of journal under J.F. column (Journal Folio)

  • Repeat the same for all transactions for that particular ledger account. If the transactions associated with that ledger account is completed continue with the next ledger account.

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