What is a general ledger?

A general ledger is a summary of all transactions that occur in a company (this is not entirely accurate, the general ledger shows you the balances and debits and credits to each specific account but does not provide detailed information on the transaction itself, the Journal is where the transactions are listed and then posted amounts are taken from the journal and put in the general ledger.)

The General Ledger, sometimes referred to as the Nominal Ledger is the main accounting record of a business which uses double-entry accounting. It generally includes such accounts as current assets, fixed assets, liabilities, revenues, expenses, capital, etc.

The general ledger is the group of accounts that support the value of accounts listed on the major financial records, such as Trial Balance, Balance Sheet, Statement of Owners Equity, Income Statement, etc.

The general ledger may be supported by one or more subsidiary ledgers that provide more detailed information on accounts listed. For example, an account payable (or receivable) subsidiary ledger will contain more specific information on each individual account.

For Example, say your General Ledger shows that you have a debit balance of $1500 in Accounts Receivable, this is a general amount, the subsidiary ledger will break down how much each customer actually owes. An example may be:

Customer A owes you $500

Customer B owes you $400

Customer C owes you $300

Customer D owes you $300

The general ledger shows the full balance while the subsidiary ledger provides more detailed information