General Ledger

The general ledger is a permanent summary of all your supporting journals, such as the sales and cash receipts journal and the cash disbursements journal. Your financial statements are built from the general ledger.

For each account title shown on your sales and cash receipts journal columns and your cash disbursements journal columns, there is a general ledger account. There are also separate general ledger accounts for miscellaneous items that don't have their own column in the journals, but are entered in a "miscellaneous" column.

For example, Cash, Accounts receivable, Accounts payable, Sales, Purchases, Telephone expense, and Owners equity are all examples of general ledger accounts. There is a page reserved in the general ledger for each general ledger account.

The individual entries in the general ledger are always from the total columns of your supporting journals. When all journal entries are posted, you can arrive at the ending balance for each account. The sum of all general ledger debit balances should always equal the sum of all general ledger credit balances.