General Ledger
The master record of all financial transactions in a business, organized by account and used to produce financial statements.
FAQs
What is the difference between the general ledger and the chart of accounts?
The chart of accounts is the list of all account categories (a directory). The general ledger is the actual record of transactions posted to those accounts. Think of the chart of accounts as the filing system and the general ledger as the files themselves.
How often should the general ledger be reviewed?
At minimum, the GL should be reviewed at month-end during the close process. High-growth companies and public companies often review daily or weekly, using continuous accounting tools to catch anomalies in real time rather than waiting for month-end.
What is a GL coding error and how is it detected?
A GL coding error occurs when a transaction is posted to the wrong account — for example, recording a capital expenditure as an operating expense. These are typically caught during account reconciliation, flux analysis (comparing current vs. prior period balances), or external audit procedures.
Related Terms
Chart of Accounts
A structured list of all financial accounts used by a business to categorize and record every transaction.
Double-Entry Bookkeeping
An accounting system where every transaction is recorded as both a debit and a credit across at least two accounts, keeping the books balanced.
Trial Balance
A report listing all general ledger account balances to verify that total debits equal total credits at a given date.
Bank Reconciliation
The process of matching a company's internal cash records to its bank statement to identify and resolve discrepancies.