The following are the objectives of ledger:-
1. To provides information about incomes and expenditures- For each head of expenditure and each income, a separate account is opened.It helps to know the amount spent and the incomes on different expenditure and income heads respectively.
2. To provide information about the position of assets and liabilities- A separate ledger account is prepared for the individual asset and liability which helps to know its effect on financial position of business during a particular period.
3. To provide information regarding the purchase and sales- A business firm can have several purchases and sales. A purchase account is prepared to know the total purchase made duriing the period and similarly, sales account is prepared to know the total sales during the period.
4. To help in th preparation of trial balance- Trial balance is prepared on the basis of information provided by the ledger account. So, ledger account is immense help for preparing trial balance.
4 comments:
Business organizations needs to write and prepare ledger account wherein all the transactions of are recorded permanently under different heads of accounts.
To classify the financial transaction
The main objective of ledger is to find out
Total sales
Total purchases
Profit and loss of business
Net effect of all similar nature transactions
give two objective of ledger
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