What is The General Ledger

The General Ledger - A Global View

The general ledger (or GL) is a record of every single financial transaction a company makes during a financial year. The GL is composed of every individual accounts required to record assets, liabilities, revenue and expense transaction in an organization.

The general ledger is made up of many individual accounts that represent a summary of all the transactions recorded for each account. Thus the line items detailing each account in the GL are elsewhere; either in the same ERP systems or else in other systems, which can include EXCEL or even be paper based.

Where possible transaction details are recorded directly in the appropriate gl account. However, when the sheer volume of transactions would become to great to record directly in the GL, these volume transactions are recorded in subsidiary ledger. In these cases, the general ledger will keep control totals reflecting the balance in the subsidiary ledger. 

Subsidiary Ledgers

For most organizations the following represent the common subsidiary ledger accounts:

• Accounts receivable (Debtors)
• Accounts payable (Creditors)
• Stock
• Purchases
• Fixed Assets

Thus the GL can be said to represent a global view of the financial state of a company.