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What is the general ledger, detailed explanation


General ledger: Financial accounting is one of the types of accounts that aim to deliver financial information to many parties and parties and some of the joint institutions that have an interest in benefiting from that financial information. As for the accountant to obtain that accounting and financial information, many procedures and steps must be taken, which is called the accounting cycle. As it passes through many stages, and among these stages that the accounting cycle passes through is the recording of financial operations in the daily notebook. After that, posting to the ledger is done, preparing a trial balance, making inventory adjustments, preparing financial statements, closing accounts and rotating them. Through our articles, we will learn about

?What is the general ledger

?What is the general ledger

The general ledger is one of the main accounting books that are concerned with the accounting cycle. It also enables us to obtain some of the accounting information as it is considered a book pertaining to one financial period only. Whereas, it is allocated to each account of the financial institution, as each account from its account is opened at the beginning of the period and assigned a page and is closed at the end of the financial period. As the general ledger consists of a table with two parties, as the first party is the debtor and the second party is the creditor, and it is recorded day by day in the book of operations, all that is updated

Types of accounts in ledger

-:There are two types of accounts in the general ledger, including them

General ledger account

Whereas, it is considered the main account for some subsidiary auxiliary accounts. It is also clear to us that the balance of the general ledger account is the sum of the balances of those subsidiary accounts

Sub-ledger account

It is considered one of the sub-accounts of the general ledger account

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

-:There are some differences between them and each of the two accounts

*For example, the customers' account at the paper mill is registered within the general ledger account, and some subsidiary accounts such as the accounts of companies, schools, printing houses, and individuals who buy paper from the factory are listed.

*The cash account is considered a general ledger account and falls under some of the sub-accounts, the cash account in the bank and the cash account in the fund.

*The stock account at the paper mill is a general ledger account and is included in the sub-accounts.


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Forms of accounts in the general ledger

-:Forms of accounts in the ledger and among these forms

1)Professor account with moving balance

This account consists of several things, including

  1. Account name.
  2.   Date.
  3.   Explanation and statement.
  4.   Journal page number.
  5.   The amount of the debtor.
  6.   The credit amount.
  7.   The balance.

2)T account

This account consists of several things, including:-

  1. Account name.
  2.   The right party is the debtor party
  3.   The left side is the credit party
  4. Debit and credit operations.
  5.   History of debit and credit operations.
  6.   account balance.
  7.   Total debit and credit operations.

Important information about general ledger accounts

-:There is some important information about the general ledger account, including it

  • Moving balance, as it enables us to know the account balance after each financial operation without having to wait for the accounts to be closed or the end of the accounting cycle in which the financial statements are prepared.
  • The case of using the general ledger account with a moving balance. We cannot know the account balance, not after we have registered the account name itself.
  • The general ledger account is considered one of the controlling and important accounts because it represents the total of the auxiliary accounts as it is important to prepare the financial statements as it is not possible for us to put many auxiliary accounts in the financial statements and instead of this we use the general ledger accounts.
  • It's best to use the general ledger after you've prepared the journal entries.

General ledger documentation processes

  • The general ledger helps to identify the accounts and the location of the origin of the business process, as we need some securities to do this, so it is important to keep all bills of exchange and some of the securities and invoices and this is where they are the original documents that enable us to do some of the restrictions that concern Journal.
  • All details must be kept as we can need to make your records and indicative numbers such as check number, invoice number, date and it also makes it easy for us to get the information in a quick way.
  • We need to put a revision mark, which expresses a distinctive mark, and put on each original document, in order to indicate its actual posting in the general ledger.

How to do balance ledger

At the end of each month, a settlement process is carried out as it is known as the trial balance, and it is also important to see the balance of restrictions on both the debtor and creditor sides, and in the event that a column imbalance occurs with another column, this means that there are some of the accounts carried over to the assistant professor’s notebook and they have not been completed. Posting it to the general ledger. Therefore, you must retrieve the account and review the general ledger, which enables us to identify some of the entries that were not recorded.

Using some of the accounting programs that enable us to record the financial operations on the computer or laptop as it helps the accountant to carry out many accounting operations quickly and easily.

This should be done on a monthly basis, so that we can review in the event of forgetfulness and error.

Definitions for use of ledger

  • Posting: It means moving the entries from the general journal to the general ledger.
  • Account balance: It is the difference between the sum of the values related to operations on the debit side and the credit side of the account.
  • Debit balance: The account balance is a debit smaller than the sum of the credit side.
  • Credit balance: The credit account balance is smaller than the sum of the debit side.
  • The account without balance: the account is without case balance if the sum of the debit side = the sum of the credit side
  • Accounts of a debit nature: such as h / assets, expenditures and withdrawals whose balances are debit.
  • Accounts of a credit nature: such as h / liabilities, equity and revenues whose balances are credit.

Definitions of the general ledger

  • The ledger is one of the accounting books that are concerned with the accounting system as it is a book that pertains to one financial period only, that is, it is opened at the beginning of the fiscal year and closed at the end of it.
  • The general ledger is a notebook in which the posting of the daily operations is carried out and each page is concerned with its name as it enables us to know the balance of each account and there are help ledgers as assistant clients and suppliers, which enables us to identify their balance and some of the amounts collected and required from each supplier
  • The general ledger is considered an amount from a group of aid accounts that enables us to obtain many accounting information that saves us time. The general ledger can support one or more sub-books. An example is the sub-accounts receivable. A book that contains a separate account for the credit account for each Client, through which the balance of each client is monitored separately in order to ensure accuracy as part of the trial balance preparation process. 
     

At the end of the article, we hope that we have explained to you the definitions of the general ledger, how the general ledger is balanced, and some forms of accounts with the general ledger