what is general ledger?

  • The general ledger is the bedrock of a business’s double-entry accounting system.
  • All transaction data required to generate the income statement, balance sheet, and other financial reports are general ledger accounts.
  • General ledger transactions are a summary of journal entries made to sub-ledger accounts.
  • The trial balance is a report that lists each general ledger account and its balance, making changes and mistakes simpler to find.



The general ledger includes a summary of all recorded transactions, whereas the general Journal contains the actual entries for most low-volume transactions. When an accounting transaction happens, it is initially documented in a journal in the accounting system. There may be several journals designed to include certain sorts of transactions (such as cash receipts, cash disbursements, or sales) or all other types of transactions. These additional transactions are documented in the general Journal. Asset sales, depreciation, interest income, interest cost, and the selling of bonds or shares to investors are all examples of general journal entries.

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As a result, the general Journal serves as a catch-all site for the first entry of some transactions that do not occur in sufficient volume to warrant recording in a specialist journal. Because these transactions are documented in chronological order, the general Journal is valuable for researching accounting transactions by date.



Businesses must record the accounts in the general ledger in the following order: balance sheet accounts first, followed by profit and loss statement accounts. The Chart of Accounts is a list of all the accounts and their numbers. The following are some examples of GL accounts:

  • Assets include current assets (cash, bank, inventory, accounts receivable, and so on) as well as fixed assets (Buildings, Machinery, Motor Vehicle).
  • Liability is divided into current liabilities (accounts payable, credit card) and long-term liabilities (Bank Loan, Vehicle Loan).
  • Capital, Drawings, and Retained Earnings are all examples of stockholder equity.
  • Sales, labor, materials, and bank interest are all sources of income.
  • Purchases, advertising, subscriptions, COGS, general expenses, and bank fees are all examples of expenses.



The general ledger provides complete transactions for all accounts, but the trial balance contains the ending balances for those accounts. As a result, the general ledger can be several hundred pages large, but the trial balance is only a few pages long.

When investigating accounts, financial accountants utilize the general ledger as their primary source of information. The trial balance has considerably more restricted use, comparing the totals of all debits and credits to ensure that the books are in balance.