Question: What Is General Ledger In Simple Terms?

What is in a general ledger?

A general ledger is the master set of accounts that summarize all transactions occurring within an entity.

The general ledger is comprised of all the individual accounts needed to record the assets, liabilities, equity, revenue, expense, gain, and loss transactions of a business.

What are the different types of general ledger accounts?

General ledger accounts are divided into five types of categories. The types include assets, liabilities, income, expense and capital. Assets represent what an individual or entity owns while liabilities represent what is owed. Income is money that is earned while expense is money that is spent.

What do you mean by general ledger?

A general ledger represents the record-keeping system for a company’s financial data with debit and credit account records validated by a trial balance. The general ledger provides a record of each financial transaction that takes place during the life of an operating company.

What is the difference between a journal and a general ledger?

Key Difference Between General Journal and Ledger

The main difference between them is that the general journal serves as the initial book of entry. Both of these books of accounts provide a way to record business transactions through the double-entry accounting system via debits and credits.

What are the 5 steps of posting in accounting?

The five steps of posting from the journal to ledger include typing the account name and number, specifying the details of the journal entry, entering the debits and credits for the transaction, calculating the running debit and credit balances, and correcting any errors.

What relationship exists between the general journal and the general ledger?

Key Takeaways. A general journal refers to a book of original entry in which accountants and bookkeepers record business transactions, in order, according to the date events occur. The general ledger tracks five prominent accounting items: assets, liabilities, owner’s capital, revenues, and expenses.

What makes up a general ledger?

The general ledger should include the date, description and balance or total amount for each account. It is usually divided into at least seven main categories. These categories generally include assets, liabilities, owner’s equity, revenue, expenses, gains and losses.

What are the 8 branches of accounting?

In this article, we’ll cover:

  • Financial Accounting.
  • Cost Accounting.
  • Auditing.
  • Managerial Accounting.
  • Accounting Information Systems.
  • Tax Accounting.
  • Forensic Accounting.
  • Fiduciary Accounting.

What are GL codes?

A General Ledger Code (GL Code) is a string of alphanumeric characters assigned to each financial entry in an organization’s ledger. A GL Code can indicate basic information such as a debit or credit by location or provide highly specific details about an entry through a GL String.