Creating a general ledger

When it comes to creating a general ledger, you have a few options for recording your
transactions. You can:

 Create a general ledger on paper

 Use a spreadsheet
 Get accounting software

The size of your general ledger depends on how big your business is. If you have a
smaller business, you might have fewer accounts and sub-accounts because you have
fewer transactions.

Each general ledger entry should have:

 An account number (if applicable)

 Account name
 Beginning account balance
 Transaction type
 Customer, vendor, and employee name (if applicable)
 Date
 Description
 Debit and credit columns
 Ending account balance

To post to the ledger, you must use double-entry bookkeeping. Double-entry

bookkeeping means that you record two entries for every transaction. One entry is a
debit and the other is a credit.

Again, your general ledger should contain a debit and credit entry for every
transaction. Your debits and credits must always balance in your general ledger. If
they don’t match, there’s an issue in your general ledger.

When creating a general ledger, divide each account (e.g., asset account) into two
columns. The left column should contain your debits while the right side contains your
credits.
Put your assets and expenses on the left side of the ledger. Your liabilities, equity,
and revenue go on the right side. Both sides must have equal values for your ledger to
balance.

At the end of each period, transfer your journal entries into your general ledger for
small business.

Keep this chart in mind when making entries in your general ledger:

General ledger example

If you’re wondering what a general ledger looks like, you’ve come to the right place.

To get started, here’s what a basic general ledger might look like:

Date Description Journal Ref. # Transaction Transaction

Debit Credit

Total

Now let’s take a look at an account in action. Take a look at a Checking Account
within the general ledger:
 Date Description Debit Transaction Credit Transaction

9/13/19 Cash Deposit 100

9/13/19 Sale-Coffee 100

9/28/19 Cash Deposit 500

9/28/19 Sale-Cake 500

Total 600 600

As you can tell, the transactions above balance each other out. If your accounts don’t
balance, you might have forgotten to record a transaction, entered an incorrect
amount, or miscalculated totals.