General Ledger

General Ledger

General ledger is one of the basic entity is the basic accounting cycle that is used to store transactions that are further used in income statement and balance sheet of a company. This can be called as the most basic or main account of a company’s financial transactions. General ledger holds entries of different further accounts such as asset accounts, cash accounts, equity accounts, liabilities account and expense account.

General ledger is mostly used in double entry accounting system and each monetary transaction is posted twice in it as credit and debit. Most of the companies maintain physical general ledgers where manual entries of debit and credit are done however with the passage of time software general ledgers are also available in the market and are being used by different companies.

Other financial statements of a company such as financial position statement, income statement and balance sheet are derived from the general ledger of a company. In general ledger credits are stored at the right side where as debits are stored at the left side. All the accounts are listed in general ledger and this listing is called as chart of accounts. At the end balances of all the accounts are extracted that are called trial balance of the company.

A ledger entry must contain date, monetary figure and description for each account. The accounts are divided into several categories as mentioned above.  A general ledger can be subdivided into number of small ledgers to store additional information.

Other Related Accounting Articles:

• Chart of Accounts
• Bookkeeping
• Analyzing Account Receivables
• External and Internal Balance Sheet
• Accounting for Non-Trading Concerns
• Accounting Principles and Accounting Equation
• How to report Profit, Losses and Cash flows
• Headline Earnings
• Bookkeeping Versus Accounting
• Accounting For Consignment / Consignment Accounts rules