General Ledger System

is the heart of financial accounting. It

manages cash, accounting entries and
financial reports.
Objectives of GLS
• Process accounting information in an online
environment,
• Performs the basic general ledger objectives by
providing a complete and accurate bookkeeping
record of all accounting transactions affecting each
ledger account and supports either the cash
accounting method or the accrual accounting method.
IS Functions of GLS
Input • General ledger systems should:
– collect transaction data promptly and accurately.
– classify/code data and accounts.
– validate collected transactions/ maintain
accounting controls (e.g., equal debits and
Process credits).
– process transaction data.
• post transactions to proper accounts
• update general ledger accounts and transaction files
• record adjustments to accounts
Output
– store transaction data.
– generate timely financial reports.
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Relationship of GLS to Other
Information Subsystems
Financial
Reporting
system
Management
Billings Reporting
System

Inventory
Sales
Control

General
Ledger
System
(GLS)

Cash
Payroll
Receipts

Cost Cash
Accounting Disbursements
Accounts
Payable

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GLS Database
 General ledger master file
principal FRS file based on chart of accounts
 General ledger history file
used for comparative financial support
 Journal voucher file
 total collection of the journal vouchers in the current period
 Journal voucher history file
 journal vouchers of past periods
 Responsibility center file
 contains financial data by responsibility centers for MRS
 Budget master file
 contains budget data by responsibility centers for MRS
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Journal Voucher Layout for a

General Ledger Master File

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Financial Reporting Process

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GLS Reports
 General ledger analysis:
– listing of transactions
– allocation of expenses to cost centers
– comparison of account balances from prior periods
– trial balances
 Financial statements:
– balance sheet
– income statement
– statement of cash flows
 Managerial reports:
– analysis of sales
– analysis of cash
– analysis of receivables
 Chart of accounts: coded listing of accounts
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Chart of Accounts