A ledger is a document or book that contains a complete record of all financial transactions of a business. It is divided into different accounts based on categories such as assets, liabilities, equity, revenue, and expenses. Every transaction made by a company is recorded in the ledger, providing an overview of its financial health.

Having a well-maintained ledger is essential for businesses to monitor their cash flow, track expenses, and ensure compliance with financial regulations. It also helps in identifying errors and fraudulent activities, as any inconsistencies can be easily detected by comparing the ledger with other financial records.

In addition, a ledger enables businesses to create accurate financial statements such as the balance sheet and income statement. These statements provide insights into the company’s financial performance and help in making informed decisions about investments, expenses, and future plans.

Overall, a ledger is a valuable tool in financial management that plays a crucial role in ensuring the success and sustainability of a business.#25#