Objectives Of Ledger

Main objectives of preparing ledger accounts can be expressed as follows:

1. Classification And Recording Of Business Transactions

The ledger classifies financial transactions into different subjects (income, expenses, assets etc.) and makes a permanent records of all the transactions systematically.

2. Basis Of Trial Balance

Trial balance is prepared on the basis of ledger accounts which helps to check the arithmetical accuracy of financial records.

3. Basis Of Profit And Loss Account

Profit and loss account is prepared at the end of accounting period with the help of ledger which helps to ascertain the profit or loss of the business.

4. Basis Of Balance Sheet

Balance sheet is prepared to reveal the financial position of business at the end of the year. Ledger provides financial data to prepare balance sheet.

5. Detailed Financial Information

Ledger accounts provide financial information about expenses, income, debtors, creditors etc. 

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