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Utilities of ledger
Following are the utilities of ledger:
Ledger account helps to get all information about a particular account like sales, purchases, machinery, etc., at a glance. For example, where there are several transactions with a debtor, the net amount due from a debtor can be known from the ledger account.
From the ledger balances extracted, a thorough analysis of account balances can be made which helps to have control over the business transactions.
With the balances of ledger accounts, trial balance can be prepared to check the arithmetical accuracy of entries made in the journal and ledger.
From the ledger balances extracted, financial statements can be prepared for ascertaining net profit or loss and the financial position.
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