General Ledger

A general ledger summarizes all transactions occurring within an entity. In addition to the general ledger, there may be a set of subsidiary ledgers. A general ledger gathers information into the financial statements of a business; this can be done automatically using accounting software or accountant, or manually by compiling financial statements from a trial balance report (which summarizes the ending balances in the general ledger).

In the general ledger, a debit and credit entry is made for each transaction entered, so that the total of all debit balances in the general ledger should always equal the total of all credit balances. If they do not match, the general ledger is out of balance, and must be corrected before it can produce reliable financial statements.

A general ledger keeps track of a company's financial data, with debit and credit account records validated by a trial balance. Each financial transaction that occurs during an operating company's lifetime is recorded in it. It also keeps account information that is needed to prepare the company's financial statements. Assets, liabilities, owners' equity, revenues, and expenses are separated by type of transaction.

Businesses using the double-entry bookkeeping method use a general ledger, which includes at least two subledger accounts for each financial transaction, and includes at least one debit and one credit for each entry. In journal entries, double-entry transactions are posted in two columns, with debit entries on the left and credit entries on the right, and the total of all debit and credit entries must balance.