A general ledger contains all accounts to record transactions related to company assets, liabilities, owner's equity, earnings, and expenses. In modern accounting or ERP software, ledger serves as a central storage for accounting data transferred from all sub-suppliers or modules such as accounts payable, accounts receivable, cash management, fixed assets, purchases and projects. The ledger is the backbone of the accounting system that stores financial and non-financial data for an organization. The collection of all accounts is known as general ledger. Each account is known as a ledger account. In manual or non-computerized systems, this might be a general ledger.
Statement of financial position and income statement and comprehensive income both come from general ledger. Each account in the general ledger consists of one or more pages. The ledger is where the post to the account takes place. Posting is the process of recording the amount as credit (right side), and the amount as the debit (left side), in the general ledger page. The extra column to the right contains the total activity that is running (similar to a checkbook).
A list of account names is called an account chart. The extraction of account balances is called the trial balance. The purpose of the trial balance is, in the early stages of the preparation process of the financial statements, to ensure equality of total debits and credits.
The general ledger should include the date, description and balance or the total amount for each account. Usually divided into at least seven major categories. These categories generally include assets, liabilities, owner's equity, revenues, costs, gains and losses. The main categories of ledgers can be subdivided into sub-users by entering additional details from accounts such as cash, accounts receivable, accounts payable, etc.
Since each bookkeeper enters one account and credits another account in equal amounts, the double-entry accounting system helps ensure the general ledger is always balanced, thereby maintaining the accounting equation:
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The accounting equation is the mathematical structure of the balance sheet. Although general ledger seems quite simple, in large or complex organizations or organizations with various subsidiaries, the general ledger can grow to be quite large and takes several hours or days to audit or balance.
Video General ledger
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Source of the article : Wikipedia
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