A ledger is a detailed record of all financial transactions that occur within a business. It contains separate accounts for each type of transaction, such as sales, expenses, assets, and liabilities. The ledger helps to organize and summarize financial information in a way that is easily understandable and accessible.

One of the key functions of a ledger is to record journal entries. These entries are the initial recording of a transaction and include details such as the date, description, and amount. By systematically recording journal entries in the ledger, businesses can ensure that their financial records are accurate and up-to-date.

The ledger also plays a crucial role in preparing financial statements, such as the balance sheet and income statement. These statements are essential for analyzing the financial health of a business and making informed decisions. By maintaining a well-organized and accurate ledger, businesses can ensure that their financial statements provide a true and fair view of their financial position.#25#