A ledger is a fundamental tool in the world of accounting and bookkeeping. It serves as a collection of all the accounts used by a company to record financial transactions. Each account in a ledger contains information about a specific aspect of the business, such as assets, liabilities, revenue, and expenses.

Ledgers are typically organized using the double-entry system, which ensures that the accounting equation (assets = liabilities + equity) remains balanced. This means that for every debit entry made in one account, there must be an equal and opposite credit entry made in another account.

The information stored in a ledger is used to prepare financial statements, such as the balance sheet, which provides a snapshot of a company’s financial position at a specific point in time. By maintaining a clear and accurate ledger, businesses can track their financial transactions, identify trends, and make informed decisions about their operations. In conclusion, a well-maintained ledger is crucial for the financial health and success of any organization.#25#