{"id":1093,"date":"2019-07-01T15:08:10","date_gmt":"2019-07-01T15:08:10","guid":{"rendered":"https:\/\/sage-new-clone.local\/en-au\/blog\/?post_type=sage_glossary&p=1092"},"modified":"2026-05-18T23:55:47","modified_gmt":"2026-05-18T13:55:47","slug":"what-is-a-general-ledger","status":"publish","type":"sage_glossary","link":"https:\/\/www.sage.com\/en-au\/blog\/glossary\/what-is-a-general-ledger\/","title":{"rendered":"What is a general ledger?"},"content":{"rendered":"
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\n\t\t\t\t\t\tWhat is a general ledger?\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t\t
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General ledger<\/span><\/span><\/h2>\n\n\n\n

A general ledger, or GL, is a means for keeping record of a company\u2019s total financial accounts. Accounts typically recorded in a general ledger include: assets<\/a>, liabilities<\/a>, equity<\/a>, expenses<\/a>, and income<\/a> or revenue<\/a>. The general ledger definition may include a physical or digital record of such information, potentially embedded in a more sophisticated system of accounting software.<\/p>\n\n\n\n

What is GL in the context of accounting<\/a>? A company\u2019s general ledger is the basis of its financial reporting and the source of the information used therein. Transactions are noted from a source document, such as an invoice or bill, and tracked in the general journal. Periodically, all transactions made within a company are posted to the general ledger. Since the general ledger is comprised of a company\u2019s total financial accounts, it is instrumental in the preparation of key financial reporting documents such as the balance sheet and income statement.<\/p>\n\n\n\n

What is a general ledger process?<\/h2>\n\n\n\n

\u25cf Making a general ledger begins with creating a journal or log with the details of every business transaction, as each transaction occurs
\n\u25cf Then categorise each transaction under a relevant account, such as sales, cash, or accounts payable
\n\u25cf At regular intervals, reconcile the information inside these accounts
\n\u25cf Once complete, transfer your journal entries to the general ledger<\/p>\n\n\n\n

What is a GL reconciliation process?<\/h2>\n\n\n\n

The reconciliation process is a matter of double-checking important accounts. Reconciliation involves checking each account within a general ledger to verify accuracy. The process begins by gathering the information for each account in review, then examining any journal entries which have been made to correct errors in the ledger.<\/p>\n\n\n\n

With journal corrections in mind, balances in the general leger are compared against financial data, such as bank statements. If discrepancies are found, reconciliation requires investigating for unusual transactions, or otherwise explaining the error.<\/p>\n\n\n\n

What is a GL code?<\/h2>\n\n\n\n

General ledger codes are numerical names you assign to an account. For example, the GL code for an accounts receivable might be account #105. Electric bills might be #203. This coding system can be used to group related accounts. For example, all utility accounts might start with #2. GL codes aren\u2019t substitutes for descriptive account names, but they\u2019re a useful tool for rapid data entry and effective organisation.<\/p>\n\n\n

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