Ledger is a principal book in which transaction are recorded in a summarize form. It is final destination of all transactions in the subsidiary book.
Dr Format of ledger Cr
SIMPLE CLASSIFICATION OF LEDGER ACCOUNT
Debtors creditors real Nominal
- PERSONAL ACCOUNT: This ledger account record the persons account such as debtors, creditors, capital and bank account
- IMPERSONAL ACCOUNT: This records non – persons account such as real and norminal account.
- Real Account: records the assets of the business such as building, motor vehicle, furniture, stock etc.
- Norminal Account: records the income and expenses of the business such as insurance, transport, salary etc.
Ledger Account is divided into
- Sales ledger / debtors ledger
- Purchases ledger / creditors ledger
- General ledger
- Private ledger
SALES LEDGER/DEBTORS LEDGER: This is used to record account relating to debtors. Debtors are those who owe money that belongs to an organisation.
PURCHASES LEDGER: This records account of creditors. Creditors are people to whom money is owned or person from whom goods have been bought.
GENERAL LEDGER: This takes care of both real and norminal account
PRIVATE LEDGER: This is ledger where properties confidential accounts are recorded.