Ledger - Meaning :-

The term ledger is derived from Dutch word ‘Legger’ which means to lie.

Ledger, therefore means a book in which various accounts are kept. A ledger is a collection or set of accounts. It is a secondary record, where transactions similar nature is grouped together in one place in the form of an account. It contains the accounts of persons with whom the business deals, assets or things possessed by the business, liabilities they have as well as the expenses incurred and income earned by the business. As all the transactions are finally entered it, it is also called ‘Book of Final Entry’.

The ledger account will have two sides – Debit side and Credit side. The left hand side of an account is known as the Debit side and is for writing debit entries. The right hand side is known as the Credit side and is meant for writing credit entries. As the top left corner the letter ‘Dr’ (Debit) and at the top right corner the letter ‘Cr’ (Credit) should be written.