To help reveal the financial position: The ledger also contains the accounts of the financial transactions relating to capital, all liabilities, and assets of the business. With the help of the balances of these accounts and the profit or loss of the business, a balance sheet may be prepared to show its financial position at a certain point in time.



The following are the important utilities of ledger accounts:

1. It keeps a permanent record of all financial transactions in a classified manner.

2. It shows detailed financial information of a business regarding debtors and creditors, assets, and income and expert

3. It helps to prepare a trial balance in order to check the arithmetical accuracy of the recording of the financial transactions of the business, It helps to prepare a profit and loss account so as to ascertain

4. The profits or loss of the business It helps to prepare the balance sheet with a view to show the financial position of the business


The ledger account or simply an account is a summarized statement of the financial transactions particularly relating to a subject, which may be a person, an asset, an expense, or an income. It is a  statement, which contains all transactions relating to a particular thing for a specified period. The account has two main sides, the left-hand side and right-hand side and in which all transactions relating to the subject concerned are recorded and either of its sides. The left-hand side of an account is popularly called the debit side and the right-hand side the credit side.

T Shaped Form

A simple form of ledger account is shaped like an English alphabet T having two sides, the left-hand side and the right-hand side, which are commonly known as a debit (Dr.) side and credit (Gr) sides respectively. Each side of the account has the same four columns of date, particulars journal/ledger folio, and amount. A specimen or ruling of a T shaped account is as follows

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