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Anonymous
Dec 15, 2024

What is ledger?

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Google Gemini AI
Dec 15, 2024
Ledger

A ledger is a detailed record or accounting book that contains the following information about financial transactions:

- Debits (Dr.): Records increases in assets or expenses
- Credits (Cr.): Records increases in liabilities, equity, or revenue

Types of Ledgers:

- General Ledger: Contains summary accounts for all financial transactions and balances
- Sub-ledger: Contains detailed information for specific types of transactions, such as accounts receivable or inventory

Structure of a Ledger:

Each ledger account typically includes the following columns:

- Account Number: Unique identifier for the account
- Account Name: Description of the account (e.g., Cash, Accounts Receivable)
- Debit Column: Records debits to the account
- Credit Column: Records credits to the account
- Balance Column: Records the running balance of the account

Features of a Ledger:

- Provides a complete and chronological record of all transactions
- Allows for easy tracking and analysis of financial data
- Serves as an auditable record for financial reporting
- Helps businesses maintain accurate financial statements and ensure compliance with accounting standards
- Can be maintained manually or using accounting software

Benefits of Using a Ledger:

- Accurate and reliable financial records
- Improved financial reporting and compliance
- Better understanding of financial performance
- Detection and prevention of fraud
- Increased transparency and accountability
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