Question: A Ledger Account is Prepared From?
- Income Statement
- Journal
- Cash Flow
- Trial Balance
Answer: Journal
A Ledger Account is prepared from the Journal accounts. In the Accounting Cycle, the Ledger is the second step after the preparation of Journal entries. An accounting ledger is a book that contains all accounts of the company and includes the debits and credits under each of these accounts and the resulting balance. Ledger is known as the book of Final Entry. In Ledger accounts, we record debits on the left side and credits on the right side. A general ledger account is used to sort balance sheet and income statement transactions. General ledgers consist of those accounts that are broad in nature like Cash, account receivables, etc. Some General ledger accounts are also considered summary records which refer to control accounts. Those details that support control accounts are found outside the general ledger and are known as the subsidiary ledger. A ledger is called the book of Secondary entries. The subsidiary ledger is also the type of ledger that contains all the details that support the control accounts. The transfer of the journal into the Ledger account is called posting.