The general ledger is the primary record of transactions for a business, and is a primary record of accounting data. The general ledger is based on a series of credits and debits, intended to produce a balance which accurately shows an equal value on both sides of the balance sheet. This is called double entry accounting, and is the traditional Western method of account record keeping. The principles related to the general ledger are also the basis of the standard accounts balance process. General ledgers are also used as primary methods in bookkeeping, usually the most reliable comprehensive method of accounting for small business. |
Examples of General Ledger:
To illustrate the posting of transactions in the general ledger, consider the following transactions taken from the example on general journal entries:
Date |
Account Names |
Debit |
Credit |
10/1 |
Cash |
8700 |
|
|
Capital |
|
8700 |
10/8 |
Car parts |
3700 |
|
|
Accounts payable |
|
3700 |
10/15 |
Expenses |
2000 |
|
|
Cash |
|
2000 |
10/17 |
Cash |
200 |
|
|
Accounts Receivable |
200 |
|
|
Revenue |
|
400 |
10/18 |
Expenses |
375 |
|
|
Car parts |
|
375 |
10/25 |
Cash |
625 |
|
|
Accounts receivable |
|
625 |
10/28 |
Accounts payable |
700 |
|
|
Cash |
|
700 |
The above journal entries affect a total of seven different accounts and would be posted to the T-accounts of the general ledger as follows:
(T-Accounts)
|
|
|
|
|
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https://www.wisconsin.edu/fadmin/sfs/89GLManual_01_07.pdf https://www.finance.upenn.edu/ftd/documentation/mje_manual.pdf |