General ledger account

A general ledger account is a record in which is recorded a specific type of transaction. These transactions can relate to assets, liabilities, equity, sales, expenses, gains, or losses - in essence, all of the transactions that are aggregated into the balance sheet and income statement.

A separate general ledger account is set aside for each specific type of transaction. For example, within the general area of inventory assets, there may be separate general ledger accounts for raw materials inventory, work-in-process inventory, finished goods inventory, and merchandise (purchased) inventory.

Examples of other general ledger accounts that are commonly used are:

Balance sheet accounts

Income statement accounts

A complete list of all general ledger accounts that a company uses is contained within the chart of accounts, which is a simple listing of account numbers and account descriptions.

A few general ledger accounts are designated as control accounts. These accounts only contain summary balances that have been posted from subsidiary ledgers. This is done in order to minimize the transaction volume cluttering the general ledger. The accounts receivable and accounts payable accounts are the most likely to be control accounts.

Related Courses

Bookkeeper Education Bundle 
Bookkeeping Guidebook