What Are The Characteristics And Advantages Of Ledger In Accouting System?


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The following are the advantages derived from ledger:
1. It is the ledger through which successful application of double entry system of bookkeeping is ensured. Each and every transaction is divided into two parts - receiver and giver - and recorded in the two concerned accounts in ledger.

2. Transactions relating to different persons or concerns are recorded in the account of each person or concern separately. As a result, complete and reliable information is available in respect of each and every account.

3. Different types of income and expenses are recorded in different accounts separately. So, it is possible to ascertain the amount of income and expenditure under each head and the overall result at the year end through trading and profit and loss account.

4. Separate account is opened for each item of assets and liabilities. It is, therefore, possible to ascertain the value of different assets and liabilities and the true financial position at the year end through balance sheet.

5. Transactions being recorded primarily in journal and thereafter finally in ledger, the possibility of errors and defalcations is remote.

6. Valuable information and statistics are collected from ledger and supplied to the management to enable them to run the concern efficiently.

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