Financial modelling terms explained

General Ledger

A general ledger is a record of the financial transactions of a business. It is one of the four basic accounting records. The other three are the cash register, sales journal and the trial balance. A general ledger is the financial summary of the company.

What is the General Ledger?

The General Ledger is a financial record of all transactions and balances for a given entity. It is a main component of an organization's accounting system and provides a chronological summary of all financial activity. The ledger is typically divided into accounts, which are used to track specific types of transactions. For example, an account might track the revenue from sales, the expenses associated with running a business, or the assets and liabilities of the company. The balances for each account are updated as transactions occur, and the General Ledger provides a snapshot of the financial position of the company at any given point in time.

How Does the General Ledger Work?

The general ledger is a record of all financial transactions that have occurred within a company. Every time a transaction occurs, it is recorded in the general ledger. This record helps to ensure that the company's financial statements are accurate and up-to-date. The general ledger is divided into different sections, which correspond to the different types of financial transactions that have occurred. For example, the general ledger might have a section for accounts receivable, a section for accounts payable, and a section for cash transactions.

What Is The Difference Between the General Ledger and a Chart of Accounts?

The general ledger is a comprehensive and detailed record of a company's financial transactions, while the chart of accounts is a list of the accounts that make up the general ledger. The chart of accounts is used to track account balances and to prepare financial statements.

Get started today with Causal

Start building your own custom financial models, in minutes not days.