A ledger is a book or electronic system used to record all financial transactions of a business or organization. It serves as the primary tool for keeping track of income, expenses, assets, and liabilities. The ledger provides a detailed account of all financial activities and helps in determining the financial health of a company.

One key function of a ledger is to maintain accurate account balances. By recording every transaction, including purchases, sales, payments, and receipts, the ledger ensures that the balance of each account is up to date. This information is essential for making informed financial decisions and monitoring the financial performance of the organization.

Additionally, a ledger helps in tracking the flow of money within the business, identifying any discrepancies or errors in financial records, and preparing financial statements such as income statements and balance sheets. Overall, a well-maintained ledger is crucial for effective financial management and ensuring the success of a business.#25#