Explanation:

Transactions in the journal are grouped by accounts in the order of assets, liabilities, equity, income, and expenses. They are then transferred to the ledger. Ledger entries appear in the order of accounts compared to the journal's chronological order.
A business may engage in thousands of transactions during a year.   Can you imagine preparing a transaction analysis, like we did in the previous unit, for all of those transactions?  It would take a lot of time and the spreadsheet would be large!  There has to be a better way to classify and summarize the data in these transactions to create useful information.
An account is a part of the accounting system used to classify and summarize the increases, decreases, and balances of each asset, liability, stockholders’ equity item, dividend, revenue, and expense. Firms set up accounts for each different business element, such as cash, accounts receivable, and accounts payable. Every business has a Cash account in its accounting system because knowledge of the amount of cash on hand is useful information.