Ledger: The Secondary Book

Meaning:
Ledger is a group or set of accounts affected in the journal. It is a book
of final entry which contains a number of accounts to which the entries
made in the journal are transferred. It is also known as “Secondary
Book” or “Principal Book”
The process of transferring entries from journal to the ledger is called
posting.

Advantages:

 It facilitates division of labour.

 It becomes easy to locate errors in ledger accounts.
 It helps the ledger clerks to complete their respective work in time
with accuracy.
 It becomes easy to refer to any particular account.
 It gives detailed as well as summarised information regarding a
business transaction.
 It forms the basis of preparing a trial balance to check the
arithmetical accuracy of the books of accounts prepared.

Difference between Journal and Ledger:

JOURNAL LEDGER
1. It is the book in which all the 1. It is the book to which all the
transactions are recorded as and transactions of a business already
when they occur. recorded in the journal are
transferred.
2. It is a subsidiary book. 2. It is a principal book.
3. It is also known as the “Primary 3. It is also known as the
Book” or the “Book of Original “Secondary Book” or the “Book of
Entry”. Second Entry”.
4. It keeps a chronological record 4. It keeps an analytical record of
of all business transactions. all business transactions.
5. The process of recording 5. The process of transferring
transactions into Journal is known entries from the journal to ledger
as Journalizing.
6. In journal, transactions are
recorded sequentially.
6. It has two columns viz. Debit
column and Credit column.
7. Narration below every journal
entry is a must.
8. Balancing is not done in the
journal.
is known as Posting.
6. In ledger, transactions are
recorded account-wise.
6. It has two sides viz. Debit side
and Credit side.
7. Narration is not necessary.
8. Balancing of a ledger account is
a must.