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MEANING OF LEDGER ACCOUNTS

We have discussed that business transactions of financial nature are recorded in the books of original records. These books are cash book, purchases book, sales book, purchases return book, and sales return book, bills receivable book, bills payable book and journal. Business transactions are first recorded in these books. The proprietor of the business expects from accounting to let him know the position of individual debtors and creditors account. He would also like to know the value of individual assets and other material information. The answers to these questions cannot be given unless; we prepare individual parties and assets accounts separately. Collection of requisite information concerning a particular account and presenting them under one head is known as ledger posting. In the words of Carter, “An Account is a ledger record in a summarized form of all the transactions that have taken place with the particular person or things specified.” 

Ledger accounts are prepared on the following format.