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The general ledger contains an entry for every transaction ever made with a business. The general ledger's first entry should be the one of the business's transaction, and it should be updated as often as necessary to ensure that every single future transaction is recorded. Since the general ledger holds all of the information regarding every single transaction in the business's history, it is the core of all of the business's accounting activity. Balance sheets and income statements are both derived from information contained in the general ledger. Each entry it records the following information: •the date of the transaction, •the balance of the transaction, and •a description of the transaction Entering this information is referred to as "posting" a general transaction and the entry itself is referred to as a "post". The general ledger may consist of smaller sub-ledgers, or accounts. Examples of commonly used sub-ledgers are accounts receivable sub-ledgers and accounts payable sub-ledgers. Each transaction either posts only in the general ledger or in both sub-ledger and the general ledger. When a general ledger is set up for the first time, the value of the starting balance and the balances of all of the sub-ledgers should be carefully determined. The worth of a business's assets such as cash and equipment, for example, should be included in the starting balance of the asset sub-ledger. A business's general ledger should be updated to include new transactions as often as it is necessary to prevent the process from becoming cumbersome. Sometimes, a particular sub- ledger should be updated more often than another sub-ledger. When using a double-entry accounting method, a method which relies on the accounting equation, the general ledger is kept with two opposite posts for each transaction in two separate ledgers or sub-ledgers. This is a beneficial method because it helps ensure that the accounting is kept in balance, and any errors in the accounting are quickly identified. If it is kept up properly, the general ledger can be a great resource for finding, verifying, and identifying transactions, even if the transactions were completed a relatively long time ago. For example, in case the accounting activities and reports of a business are audited, either externally or internally, a well-kept general ledger can be a source of detailed transaction history.
Able Bookkeeping Provides Bookkeeper/Bookkeeping Services for NWA including Rogers AR, Bentonville AR, Bella Vista AR