Master accounting record that holds the balance and activity of each account used to produce financial statements.
The general ledger is the master record of a business’s accounts. It summarizes the debits, credits, and running balances that result from posted journal entries and provides the account-level foundation for the trial balance and financial statements.
The general ledger is where accounting structure becomes reportable numbers. If postings are incomplete, miscoded, duplicated, or unreconciled, the balance sheet and income statement inherit the problem.
Transactions are first captured through journal entries or system modules such as sales, purchasing, payroll, and fixed assets. Those entries post into the general ledger accounts defined by the chart of accounts. Subledgers may hold detailed customer or vendor activity, but the general ledger carries the control totals used for reporting.
At period end, accountants review ledger balances, investigate unusual activity, post adjustments, and then pull a trial balance from the general ledger.
If a business records a credit sale, the journal entry eventually updates ledger balances such as:
| Account | Effect In The Ledger |
|---|---|
| Accounts Receivable | Debit balance increases |
| Sales Revenue | Credit balance increases |
The general ledger keeps those account balances available for statement preparation and reconciliation.
The general ledger is not the same as the journal. Journal entries are the posting source, while the ledger is the account-by-account running record after those entries have been posted.