Technical definition
The complete collection of accounts in which an entity accumulates transaction effects.
How it works
Journal entries are posted to individual ledger accounts. The ledger answers how an account balance developed; the journal answers when transactions occurred. Ledger balances feed the trial balance and ultimately the financial statements.
Everyday example
All cash receipts and payments are posted to the Cash ledger account, producing the period-end cash balance.
Common pitfall
The journal and ledger are related but not interchangeable views.