December 6, 2021


Accounting + Finance Blog

Meaning and format of Ledger Book in Accounting

Meaning and format of Ledger Book in Accounting

It is in the ledger book the double-entry of a transaction is posted. Also, the ledger is one of the principal books for every business. Normally, transactions are recorded in the subsidiary books. Next, they are posted to the ledger. In this article, I will define this term and state its format.

Definition of Ledger Book

A ledger book is a book that classifies and summarizes business transactions that are recorded in the subsidiary books, permanently. It can also be defined as a book that categorizes and records all the personal and impersonal accounts of an entity.

What is a ledger account?

A ledger account is a page in the ledger that houses a specific transaction. For example, a sales account.

Key Explanations

A ledger book classifies all accounts by categories. There is a sales ledger, used to record account receivables. Purchases ledger for account payables and general ledger for every other account including sales and purchases account.

It allows for a summary. You can summarize each account. This is done under the “particular” or “detail” column in the ledger book. Summarizing accounts in this way helps in tracing recorded transactions with ease.

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The Ledger can be on hard copy or is digitalized. Modern types are in digital format either as spreadsheets in MS Excel or a computer application package like Sage 50 and QuickBooks. Any of these serves the same purpose. However, with technological advancement, ledgers may be carried on smartphones.

Business transactions are not posted to the ledger book immediately after they occur. These transactions pass through source documents and subsidiary books before they are posted to the principal book. For example, when a transport expense occurs, there must be a source document as proof of the transaction. Next, a journal entry is raised. After which it is posted to the book.

Format of Ledger book

Before technology became the mainstay in accounting, there were books (hardcopy books) on which transactions were recorded. The format of this principal book is shown below.

As you can see, the main book is divided into two halves. The right-hand half is the debit side. While the left hand is the credit side. Each half has columns for date, particulars/details, folio/reference number, and amount.

Next is digitization. The use of Spreadsheet packages like MS Excel and computer accounting application software have changed the look of the ledger. It now looks like this:

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Here, the debit and credit columns are placed close to each other. There is also a column for balance. There are columns for data, particulars, and reference numbers as well.


Finally, the ledger book records a summary of transactions Permanently. It is here, the double-entry principles are applied. In this tech world, computers and smartphones are used. In this case, Spreadsheet and accounting software has become prominent.