Dictionary / General Ledger

What does General Ledger mean in accounting?

Quick definition

Financial reporting

The general ledger is the complete set of accounts that holds every debit and credit in your books.

Read more below

The general ledger is the complete set of accounts that holds every debit and credit in your books: cash, receivables, payables, income, expenses, and equity. Every journal entry posts here. A paper ledger book is the same idea written by hand, one page (or section) per account.

Financial report sheets and a presentation folder illustrating financial statements

Examples

A purchase that hits two ledger accounts

You pay $220 to a software vendor on the business Visa for design software. The credit-card liability increases $220 and software expense increases $220. Both lines live in the general ledger. In QuickBooks Online, open the Visa register or run a transaction report by account. In Xero, use Account transactions for that GL account.

Checking the ledger at month-end

You run the trial balance. Checking shows $18,440, matching the reconciled statement. Accounts payable shows $3,100, matching the AP aging. If software expense is $0 but the software vendor's charge posted, the ledger is missing the coding. Fix the card transaction, not the report.

Why it matters

If the ledger is messy, every report is messy. The trial balance is just the ledger totaled. The balance sheet and P&L are the ledger grouped. Clean the ledger; do not decorate the reports.

Further reading

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Frequently asked questions

What is in a general ledger?

Every account you use: assets, liabilities, equity, income, and expenses, with the transactions posted to each one. The chart of accounts is the list of those accounts. The ledger is the activity inside them.

What is an example of a GL account?

Checking, accounts receivable, accounts payable, sales, and office supplies are typical GL accounts. A lighting supplier is a vendor, not a GL account. The bill to that supplier posts to AP and to whatever expense or asset account the purchase belongs in.

What are the five types of general ledger accounts?

Assets, liabilities, equity, income, and expenses. Some lists split income and expenses as 'nominal' accounts and the first three as 'real' accounts. For a small-business file, those five buckets are enough.

Is a ledger book the same as a general ledger?

Yes in meaning. A ledger book is the paper version: dated columns of debits and credits by account. QuickBooks Online and Xero are the same structure on a screen. Do not create a separate dictionary page for the notebook.