What is a general ledger?

In a nutshell

In accounting, a general ledger is a record of a company’s financial transactions. It records and summarises all the revenue and expenses of the business. The ledger is organised into five main types:

• Assets – the value of things that the business owns (e.g., inventory or equipment)
• Liabilities – the amount that the business owes, (e.g., bank loans)
• Equity – funds introduced into the business by shareholders.
• Revenue – money coming into the business through sales, interest or dividends.
• Expenses – money paid out to keep the business running (e.g., rent or software subscriptions).

Here’s an example general ledger: