Ledger is the principal book of accounts where similar transactions relating to a particular person or property or revenue or expense are recorded. In other words, it is a set of accounts. It contains all accounts of the business enterprise whether real, nominal or personal. The main function of a ledger is to classify or sort out all the items appearing in the journal or other subsidiary books under their appropriate accounts so that at the end of the accounting period each account will contain the entire information of all the transactions relating to it in a summarised or condensed form.

For instance, all the transactions that have taken place with Mr. Mathur will be entered in Mathur’s Account.

Similarly, all items relating to cash, sales, purchases, salaries, discount, etc. appear in their respective accounts.

Ledger is defined as a “Book which contains in a summarised and classified form of permanent record of all transactions. Ledger is called the principal book of account as final information pertaining to financial position of a business emerges from this book.