The general ledger must sound familiar to accountants. It’s a very important part in the financial recording process. Is that really the case? Well, this article will discuss more deeply about general ledger. Aside from that, if you also need an expert to handle the bookkeeping process in your company, we recommend you call the bondi junction xero bookkeeper.
General Ledger is one part of the accounting cycle. The contents of this ledger are collections of transactions contained in general journals and special journals. Simply put, this ledger classifies and classifies the same approximate account to make it easier for accountants to identify accounts.
Each company has a number of ledgers that vary depending on the number of transactions carried out by a company when viewed from the type, volume, and information desired by the company.
The term recording in this ledger can be called a post that is done when we have finished recording in a public journal. There are two classes of accounts in the ledger, namely:
– Real accounts, i.e. accounts that appear in the recording of the balance sheet, assets, debt, liabilities, and capital.
– Nominal accounts i.e. account contained in the income statement and include income and expense accounts.
There are 5 main functions of ledgers, namely:
1. Media to summarize transaction data that has been recorded in general journal books.
2. Tools for classifying financial data.
3. A tool to find out the number or condition of accounts and accounts in real terms, whether there are differences or even the same.
4. The basis for grouping transactions that exist in previous journals.
5. Complementary material for preparing financial statements.
Its role in a business is very important, especially in terms of financial reporting. It contained a variety of accounting journals that successfully recorded all financial activities. General ledgers have amazing benefits too.
– Balancing various financial statements.
– Has the main track record of financial statements.
– It can provide clues to odd or unusual transaction activities.
– It can help indicate data manipulation or fraud in the recording.
– It can find out the financial health condition of a company or business.