What is the Purpose of The Ledger

The Purpose of the General Ledger is to show Classification / Kinds of Accounts separately in a summarized form. At the end of accounting period, all the Permanent Accounts are finally balanced and the closing or ending balances are transferred to Balance Sheet while all the Temporary Accounts are closed to Income Summary Account and then this account is closed to Income Statement Account.

As, all the Accounts are finally summarized and classified separately in a ledger, so the ledger is called Books of Final Entry or King of Accounts.