Main objective of preparing ledger account is to?

The correct answer is 4. To ascertain the collective effect of all transactions pertaining to a particular account. The reason being is that in the ledger account all the effects are recorded for example,  how much money is spent on a particular type of expense or how much money is receivable from a debtor. In ledger accounts, information can be obtained about a particular account.

Ledger is the Principal book of accounts and also called the book of final entry. It summarises all types of accounts whether it is an Asset A/c, Liability A/c, Income A/c, or Expense A/c. The transactions recorded in the Journal/Subsidiary books are transferred to the respective ledger accounts opened.

Importance of preparing ledger accounts:

1. Ledger accounts get the ready results i.e. helps in identifying the amount payable or receivable.
2. It is necessary for the preparation of the Trial Balance.
3. The financial position of the business is easily available with the help of Assets A/c and Liabilities A/c.
4. It helps in preparing various types of income statements on the basis of balances shown in ledger accounts.
5. It can be used as a control tool as it shows balances of various accounts.
6. It is useful for the management to forecast or plan for the future.