These numbers may range from a simple three-digit code to a more complex version that identifies individual departments and subsidiaries. General ledger accounts are assigned unique identifying account numbers. The general ledger is usually printed and stored in an organization's year-end book, which serves as the annual archive of its business transactions. In the latter case, a person researching an issue in the financial statements must refer back to the subsidiary ledger to find information about the original transaction. In some cases where the volume of transactions would overwhelm the record keeping in the general ledger, transactions are shunted off to a subsidiary ledger, from which just the account totals are recorded in a control account in the general ledger. In most cases, detailed transactions are recorded directly in these general ledger accounts. 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. In addition, the general ledger is summarized at the end of each reporting period to produce a set of financial statements, which are the income statement, balance sheet, and statement of cash flows. Similarly, it is a key source of information for a firm’s outside auditors, who test a selection of the transactions in the ledger to ensure that they were correctly recorded. This database can be called upon when you are researching individual transactions, since the ledger provides a source document reference number for each one. The general ledger is the main database in which an organization records its business transactions. If they do not match, the general ledger is said to be out of balance, and must be corrected before reliable financial statements can be compiled from it. The general ledger contains a debit and credit entry for every transaction recorded within it, so that the total of all debit balances in the general ledger should always match the total of all credit balances. The general ledger, in turn, is used to aggregate information into the financial statements of a business this can be done automatically with accounting software, or by manually compiling financial statements from the information in a trial balance report (which is a summarization of the ending balances in the general ledger). There may be a subsidiary set of ledgers that summarize into the general ledger.

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

Generalledger