- To ascertain the debtors and creditors of the business
- To ascertain the financial position of the business
- To ascertain the profit or loss of the business
- To ascertain the collective effect of all transactions pertaining to a particular account
Main objective of preparing ledger account is to?
The correct answer is 4. To ascertain the collective effect of all transactions pertaining to a particular account. The reason being is that in the ledger account all the effects are recorded for example, how much money is spent on a particular type of expense or how much money is receivable from a debtor. In ledger accounts, information can be obtained about a particular account.
Ledger is the Principal book of accounts and also called the book of final entry. It summarises all types of accounts whether it is an Asset A/c, Liability A/c, Income A/c, or Expense A/c. The transactions recorded in the Journal/Subsidiary books are transferred to the respective ledger accounts opened.
Importance of preparing ledger accounts: