what is Ledger, Importance and types of ledger?

LEDGER :
                                    Ledger is a summary of all transactions in a journal. A ledger is a record of all business transactions made by a firm. This is often called as chart of accounts. General ledger has three account types namely assets, liabilities and equity accounts. Most of the firms have almost same accounts like cash, account payable and retained earnings, but some may have specialised accounts for specific projects.

TYPES OF LEDGER:

There are three types of ledger:
1.SALE LEDGER-   Include details of the all customers and the transaction that had taken place, including when payment was received. Other terms are debtors or customers .
2.PURCHASE LEDGER- Include the supplier details and all the transaction, this is  sometimes called suppliers or creditors ledger.
3.GENERAL LEDGER-  General Ledger is divided into two types – Nominal Ledger and Private Ledger. Nominal ledger gives information on expenses, income, depreciation, insurance, etc. And Private ledger gives private information like salaries, wages, capitals, etc. Private ledger is not accessible to everyone. 

Ledger account examples :

Assets	Liabilities	Stock	Operation revenues	Operating expenses
Cash	Debt	Stockholder equity	sales	Salaries and wages
Land	Account payables	Common stock	Services fees	Office expenses
Account receivables	Loans	Retained earnings		Depreciation expense
Equipment	accrued expenses

Ledger Account Examples :

Assets

• Cash
• Land
• Accounts receivable
• Equipment

Liabilities

• Debt
• Accounts Payable
• Loans
• Accrued expenses

Stock

• Stockholders Equity
• Common Stocks
• Retained Earnings

Operative Revenues

• Sales
• Services Fees

Operating Expenses

• Salaries and wages
• Office Expenses
• Depreciation Expense
  

  Following image shows the format of General Ledger Account 

  

  Rules for writing Journal Entries in Ledger Account

  Liabilities: This decreases on the side of debt and increases on the credit side.
  Assets: In assets, the figure increases on the left side or you can say the debit side. While this decreases on the credit size or the right side.
  Capitals: This follows the same rule as liabilities.
  Gains or Income: In this, there is a decrease on the debit side. Also, there is an increase in the credit side.
  Expenses: The expenses in the ledger decreases on the credit side while increases on the debit side.
  
  Importance of  Ledger :
  
  Ledger is the most important book of account.It is the principle book of account which contain all the information regarding business transaction.The utility of ledger accounts can be judged from the following benefits derived from it.
  
  1.Classification of transaction: Ledger book helps in classification of recorded transaction and, thus leading to easily identification of accounts of accounts of assets, liabilities,capital,revenue and expenses.
  2.Complete Information Of Account: It provides complete information about all changes that have occurred in an account during an accounting period. It also throws light on factors which resulted in increase/decrease in an account.
  3.Facilitates Preparation Of Trail Balance:It helps to find out final balance of an account by the process of balancing ledger accounts thus facilitating the preparation of trial balance which is very crucial to check the arithmetical accuracy of books of accounts.
  4.Facilities The Preparation Of Financial Statement : Ledger books supply information for the preparation of financial statement i.e. Trading , Profit & Loss Account and Balance Sheet.They also help in identifying adjustment which are to be incorporated in financial statement.