Accounting technology / Glossary / General ledger

What is a general ledger?

Definition

The general ledger, or GL, is the complete record of a company's financial transactions, organised into the accounts listed in its chart of accounts: assets, liabilities, equity, income and expenses. Every journal entry posts to it, and its account balances produce the trial balance, from which the profit and loss account and balance sheet are prepared.

Also calledGLnominal ledgerbook of final entry

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Organised by: Chart of accounts
Produces: Trial balance and statements
UK name: Nominal ledger

How the general ledger works

Each account in the ledger shows an opening balance, every debit and credit posted in the period, and a closing balance. Detail usually lives in sub-ledgers, such as sales, purchases, fixed assets and payroll, which post summaries to control accounts in the general ledger; the sub-ledger totals must agree to those accounts. Because every entry has equal debits and credits, the trial balance of all accounts balances. Modern ledgers add dimensions such as department, location, entity or project to each line, so one account can be reported many ways without multiplying the chart of accounts. In the UK the general ledger is also called the nominal ledger. Ledgers range from small business software such as Xero and QuickBooks through mid-market systems such as NetSuite and Sage Intacct to AI-native ledgers such as Rillet, Digits and Quanta.

Common questions

What is the difference between the general ledger and a sub-ledger?+

Sub-ledgers hold the detail for one area, such as each customer's invoices. The general ledger holds the summarised totals in control accounts, alongside every other account in the business.

What is a trial balance?+

A list of every general ledger account with its closing debit or credit balance at a date. Total debits equal total credits, and it is the starting point for the financial statements.

What is a general ledger account code?+

The number that identifies an account in the chart of accounts, such as one series for assets and another for expenses. Codes keep postings consistent and make reporting and mapping between systems easier.