A ledger is the master record of all financial transactions within an organisation, organised by account. The general ledger (GL) contains every debit and credit entry that feeds into the financial statements — it’s the single source of truth for a company’s accounting.
Each account in the ledger (cash, accounts receivable, revenue, rent expense, etc.) tracks the running balance of debits and credits. Together, these accounts produce the trial balance, income statement, and balance sheet.
You’ll hear this when…
“Post it to the ledger” or “the GL entry” are everyday phrases in accounting departments. When finance teams talk about “closing the books” at month-end, they’re finalising ledger entries, reconciling accounts, and ensuring the general ledger is accurate before producing financial statements.
In modern companies, the general ledger lives inside accounting software (QuickBooks, NetSuite, SAP), but the concept is the same as it was with handwritten books: every transaction gets recorded in a structured, auditable format.
Sub-ledgers
Large organisations break the general ledger into sub-ledgers for detailed tracking. The accounts payable sub-ledger tracks individual vendor balances. The accounts receivable sub-ledger tracks customer balances. These roll up into the general ledger’s summary accounts.
Source: Double-entry bookkeeping principles, codified in GAAP and IFRS frameworks