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General Ledger: Definition and Meaning
Definition
The general ledger is the central accounting record containing all of a business’s accounts and the transactions posted to them.
Why It Matters
The general ledger is the underlying source for trial balances and financial statements. It organizes transaction information by account and helps accountants trace balances back to individual entries and supporting documents.
Reliable general-ledger records depend on a thoughtful chart of accounts, consistent transaction coding, timely reconciliations, appropriate approvals, and period-end review.
Example
A company’s cash, receivable, revenue, expense, liability, and equity accounts are maintained in its general ledger.
Related Terms
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