What is a General Ledger?

What is a General Ledger?

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

What is GL in the context of accounting? A company’s 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’s total financial accounts, it is instrumental in the preparation of key financial reporting documents such as the balance sheet and income statement.

Subscribe to the Sage Advice newsletter, and receive our latest advice direct to your inbox.