A ledger is a book or computer document used to keep track of financial transactions in a systematic manner. It is an essential part of the accounting process, as it helps in organizing and summarizing the financial information of a business.

Ledgers are typically divided into different accounts, such as assets, liabilities, equity, revenue, and expenses. Each account contains details of specific financial transactions, such as sales, purchases, expenses, and payments. By recording these transactions in a ledger, businesses can accurately track their financial performance over time.

Furthermore, the ledger serves as a basis for preparing financial statements, such as the income statement, balance sheet, and cash flow statement. These statements provide a snapshot of the financial health of a business and help in making informed decisions.

In conclusion, a ledger is a fundamental tool in accounting that enables businesses to maintain accurate financial records and make sound financial decisions.#25#