Definition

A general ledger is part of any company's record-keeping system to store its financial data in the form of debit and credit transactions that are validated by a trial balance. Apart from recording every financial transaction during the operational life of a company, it holds account information required to prepare financial statements. The transaction data is generally classified by type of accounts within revenues, expenses, assets, liabilities, and owner equity.

Example

General Ledger software providers - NetSuite, Sage Intacct, Sage 50cloud

Why it matters

A general ledger provides a detailed and accurate record of a company's financial transactions and enables easy compilation of trial balance and financial statements. Since it reports the actual revenue and expenses, companies can easily stay on top of their spending. Companies may also use a general ledger to spot any unusual accounting transactions.

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