The General Ledger

Question 1

Every financial transaction is recorded in the general ledger using a double-entry bookkeeping system.

Answer 1

This means for every debit entry made in one account, there must be an equal and opposite credit entry in another account.

Question 2

Entries in the general ledger are typically organised chronologically, with the most recent transactions listed at the top.

Answer 2

A general ledger is an essential tool for preparing financial statements, such as the balance sheet and income statement.

Question 3

The GL is a comprehensive where all of a business’s financial transactions are recorded and organised by account.

Answer 3

Posting transactions to the ledger: transferring information from journal entries to the ledger.

Question 4

The GL consists of individual accounts for each category:

Answer 4

Assets, liabilities, equity, revenues and expenses.

Question 5

Each account has a left (debit) side and a right (credit) side.

Answer 5

The total of debits and credits in the ledger must always be equal.

Question 6

Each transaction posted in the ledger includes a reference to the journal entry number, the date and a brief description of the transaction.

Answer 6

After all transactions for the period have been posted, each account in the ledger is balanced.