The General Ledger

The general ledger is where all accounting transactions are posted in a double entry
system using debits (on the left) and credits (on the right) for each transaction. An
additional column to the far right can keep a running total of activity in the account,
similar to your checkbook.

The general ledger provides data for the Balance Sheet. The ledger can be
electronic or physical depending on whether you are using computer software or a
manual system. Most companies use a computerized version of the general ledger,
allowing for greater ease of entry and reporting.

All accounts in the chart of accounts are grouped in one of five categories: Assets,
Liabilities, Owner's Equity, Revenue, and Expenses. The general ledger is organized
according to the chart of accounts, with a separate register, file, page, or card for
each account.

Examples of General Ledger Entries

Account No. 101

Cash – Regular Checking Debits Credits Balance
Date and Explanation On the On the 25,000.
Left Right 15
02/22/07 Deposit for Thorndike 12,800.0 37,800.
Widget Sales 0 15
02/24/07 Transfer to Payroll 11,252.4 26,547.
6 69

Account No. 102

Cash – Payroll Checking Debits Credits Balance
5,020.0
5
02/24/07 Transfer from checking 11,252.4 16,272.
6 51
02/27/07 Pay Billy Joebob 640.20 15,632.
31

Account No. 401

Sales – Widgets Debits Credits Balance
11,543.
62
02/22/07 Thorndike Order 12,800.0 24,343.
0 62

Account No. 521

Expenses – Payroll Debits Credits Balance
1,210.0
8
02/27/07 Pay Billy Joebob 640.20 1,850.2
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