Ledger comprises information from journals. Every month all information from journals are posted into ledgers. Ledger's objective is to arrange individual transactions present in all the journals.
Ledger can also be termed as a book in which all accounts are kept.
There are five kinds of general ledgers which we create for management for our customers. The kinds include:
1. General Ledger- The book in which all other accounts are kept.
2. Purchases Ledger- The book has personal accounts of credit suppliers who are also known as creditors. The supplier's account balance signifies the amount which the business owes to its suppliers. Hence, the total amount of balances in the purchases ledger is the sum the business owes by its credit suppliers. This sum is also called account payables or formerly known as trade payables which are displayed as a current liability on the balance sheet.
3. Sales Ledger- The book has personal account information of business' credit customers who are also known as debtors. What the customer owes to the business is the balance in his/her account. So, the total of balances shown in a sales ledger is the sum owed by the business by its credit customers. The sum amount over here is known as accounts receivables or formerly called trade receivables which are displayed as current assets in the balance sheet.
4. Debtors Ledger- This kind includes information from the sales journal. The objective of this kind of ledger is to give information on customers who owe money to the organisation and also information on how much money they owe.
5. Creditors Ledger- This kind of ledger has information from the purchases journal. The prime objective of this kind of journal is to provide knowledge about all suppliers the business owes money and how much money they owe.
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